U.S. Dollar Strength Continues to Fuel Broad Based Selloff in Metals This Week
Almost no metal was spared this week as the group traded down indiscriminately, with each of the major metals down at least 1.5% since the opening of trading Monday. Nickel was the hardest hit, down 6.5%, marking its worst weekly performance in almost four months as the perception that a looming ore export ban by the Philippines will not be imposed in the near-term. A proposed bill in that nation calls for processing of ores prior to export, but a House Member of Congress (Amante) was quoted in the press this week as saying any prohibition on export could take as long as seven years to implement, relieving fears of an Indonesian style impact on supply. Tin also broke through its September 2013 lows this week Tuesday, before rebounding somewhat as we head into the weekend, to finish the week down 0.7%. With the U.S. dollar putting in a strong performance over the last two weeks vs major currencies (DXY ↑1.7%), the short list of other base metals were also weak across the spectrum, each down more than a percent: copper (↓1.8%, $3.11/lb), lead (↓3.7%, $0.96/lb) and zinc (↓5.1%, $1.03/lb). The iron ore spot quote for the benchmark 62% Fe fines-CFR China product was down 2.0%, to $82/tonne. Precious metals also found no shelter this week: gold (↓3.1%, $1,230/oz) on its way to giving back any gains made this year, a feat already accomplished by platinum (↓3.0%, $1,369/oz) and silver (↓3.0%, $18.64/oz), where silver sits well below its 2014 entry point. Palladium was hardest hit among the precious metals down 6.4% to $836/oz, but still sits up more than 16% year-to-date. Uranium was up 0.9% for the week, with the UxC Broker Average Price ending the week at $33.25/lb U3O8.
Here’s what is in the Dig this week:
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[Banff rail photo source]