CAPITAL MARKETS

PMI data fails to boost base metals, gold lower on hawkish comments

Base metals were mainly lower on the London Metal Exchange after China’s manufacturing PMI data showed a slight increase in November but worries about the new COVID-19 variant continue to weigh on markets.

Staff reporter
 Brazil-focused Amarillo Gold soared amid support for a takeover by Hochschild Mining

Brazil-focused Amarillo Gold soared amid support for a takeover by Hochschild Mining

"The recovery in manufacturing PMI is likely to be a one-off rather than any indication of structural change in the Chinese economy, and the risk of power restrictions returning remains as we approach winter," Marex's Al Munro said from the LME desk.

"In addition, with China likely to impose stricter border control to prevent the spreads of Omicron, which was already evident with import suspension from Mongolia's Erenhot port; it could suggest China manufacturing demand will encounter more headwinds in the coming months."

Both copper and nickel closed down more than 1.5%.

The gold price dipped to US$1,774 an ounce on the spot market in reaction to US Federal Reserve chair Jerome Powell's "hawkish" comments about the possibility of more aggressive tapering.

Amarillo Gold (TSXV: AGC) was the standout among mining equities in Toronto, closing up 80% to C40.5c, as 17.7% shareholder Eric Sprott announced his support for the takeover by Hochschild Mining.

Finally, Glencore was little changed in London after activist fund Bluebell Capital Partners reportedly asked it to separate its thermal coal business because it had become a barrier to investment.

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