Volume has been light with 4,036 lots traded as of 07:07 BST, this compares with 15,831 lots around this time on Wednesday. This morning’s pullback/consolidation follows a solid up day on Wednesday, when prices closed up an average of 1.5%, spread between lead being unchanged, nickel prices being up 3.5% and copper prices being up 2.4%.

Precious metals are for the most part slightly weaker this morning with spot gold prices off 0.2% at $1,254.15 per oz, silver prices are off 0.4%, platinum prices are off 0.1%, while palladium prices are up 0.3% at $809.80 per oz. On Wednesday, gold and silver prices were little changed, while platinum prices were up 0.3% and palladium prices rose 0.7%.

In Shanghai, the base metals are mixed, tin prices lead on the upside with a 1.2% gain, copper prices are up 1% at 47,790 yuan per tonne and nickel prices are up 0.6%, while the rest are little changed. Spot copper prices in Changjiang are off 0.5% at 47,030-47,230 yuan per tonne, which shows prices started the day weaker but have gone on to rebound. The LME/Shanghai copper arb ratio has picked up to 8.18.

In other metals in China, September iron ore futures are off 0.3% on the Dalian Commodity Exchange, while on the SHFE, steel rebar prices are down 2.1% and gold and silver prices are little changed. In international markets, spot Brent crude oil prices are up 0.3% at $54.12 per barrel and the yield on the US ten-year treasuries are around 2.34%.

Equities were weaker on Wednesday with the Euro Stoxx 50 down around 0.3% and the Dow closed off 0.2%, while Asia this morning is generally weaker on the back of US Federal Reserve talk of shrinking the balance sheet later this year. The Nikkei is down 1.4%, the Hang Seng is off 0.4%, the ASX 200 is down 0.3% and the Kospi is off 0.4%, while the CSI 300 bucks the trend with a 0.2% gain.

The rebound in the dollar index continues to appear to be petering out with the index at 100.49, this after a recent rebound to 100.86 from a low of 98.85 on March 27. Conversely, the euro is consolidating at 1.0675, after a low of 1.0634, the sterling is firmer at 1.2484, as is the yen at 110.52, while the Australian dollar is weaker at 0.7548. The yuan is weaker at 6.8892 and most other emerging market currencies are weaker too, rattled by the prospects of the US reducing liquidity.

Data out today includes China’s Caixin services PMI that dropped to 52.2, from 52.6, Japan’s consumer confidence climbed to 43.9 from 43.1, while German factory orders climbed 3.4%. Data out later includes: EU retail PMI, UK housing equity withdrawal, ECB monetary policy meeting accounts, US Challenger job cuts, initial jobless claims and natural gas storage. In addition, European Central Bank president Mario Draghi is speaking.

The base metals put in a strong performance on Wednesday but are weaker this morning, especially copper and nickel that were the two main gainers yesterday. We wait to see if concerns about less Fed liquidity spread through the markets. If not, then the metals look well placed to push higher in line with our overall mildly bullish outlook.

Gold prices are consolidating in high ground, we expect them to remain firm in the run up to the French election, but other political events such as Brexit negotiations and the two-day meeting between China’s president Xi Jinping and US president Donald Trump, which starts today, also provide a level of uncertainty. Silver is following gold’s lead, while palladium prices remain bullish, they set a fresh high for the year on Wednesday at $816 per oz and platinum prices lack bullishness.