Metal market sees little action as China marks Lunar New Year

By Onome Amuge

 

Thursday’s trading on the London Metal Exchange is expected to be somewhat quiet as base metal markets in China and some parts of Southeast Asia take a break to mark the Lunar New year.

As of Thursday morning, three-month base metal trade activities were less active with prices generally consolidating recent gains. Trade volume also dropped with 1,269 lots traded compared to a more normal level of about 6,500 lots at a similar time of day. However, market analysts say this is not surprising considering the closure of Chinese markets.

Copper gained 0.2 per cent to stand at $8,288.50, aluminum jumped 0.1 per cent at $2,071 per tonne, zinc was little changed at $2,728.50 per tonne, silver rose by 0.7 per cent at $27.19 per oz, while gold was little changed at $1,842.64 per oz.

As the metals continue to look strong, dealers are concerned whether they can hold on to the gains, or build on them, with China on holiday.

Based on the current charts, analysts said it looks like most of the metals have broken out to the upside of sideways-to-downward continuation patterns that have lasted varying lengths of time including gold prices which have been rebounding within their sideways-to-down channel. Nevertheless, with lower liquidity being experienced at the moment, increased volatility has been predicted for the rest of the day until Chinese participants return to the market.