(MB) Base metals traded on the London Metal Exchange are for the most part consolidating this morning, Tuesday January 2, with lead the exception where prices are up 0.6% at $2,514 per tonne.The rest are little changed with copper prices at $7,254 per tonne, but trading volume has been high at 11,821 lots as of 7.30am London time. This comes after an overall positive close to the year on Friday December 29, with most of the metals finishing 2017 at or close to the year’s highs – the exceptions being lead and tin. Precious metals are stronger this morning, with the complex showing an average gain of 0.8%. Palladium continued to lead the advance with a 1.1% gain to $1,073 per oz, while spot gold prices are up 0.5% at $1,309.30 per oz. Gold, silver and platinum prices are being supported by a weaker dollar and an uptick in geopolitical tensions in the Middle East. On the Shanghai Futures Exchange today, the base metals complex is mixed with nickel (+2.4%), tin (+1.0%) and aluminium (+0.9%) the gainers and lead (-0.9%), copper (-0.6%) and aluminium (-0.2%) the losers. February copper was recently quoted at 55,260 yuan ($8,509.79) per tonne and spot copper prices in Changjiang are down 1.0% at 54,650-54,750 yuan per tonne. The LME/Shanghai copper arbitrage ratio stands at 7.61.In other metals in China, iron ore prices are up by 2.5% at 543.50 yuan per tonne on the Dalian Commodity Exchange. On the SHFE, steel rebar prices are up 0.2%, gold prices are up 0.5% and silver prices are up 0.4%. In wider markets, spot Brent crude oil prices remain strong at $67.14 per barrel – up 0.80%, the yield on US 10-year treasuries is at 2.42% and the German 10-year bund yield is higher at 0.45%. Equities are for the most part firmer today with the Hang Seng up 1.87%, the Shanghai CSI 300 up 1.4%, the Kospi is up 0.49% while the ASX 200 is off 0.06%. The Nikkei is closed. The dollar index, at 92.05, broke below support at 92.50 on Friday December 29, which suggests the index is now going to test the September 2017 low at 91.01. A breach of that would signal that the 2017 downward trend is set to continue. The weaker dollar reflects a slump in Treasury yields and weaker demand for dollar funding globally. This is supportive of risk assets, including equities and commodities. While the dollar is weaker, most of the currencies are stronger: euro (1.2034), sterling (1.3540), the Australian dollar (0.7832), although the yen is consolidating (112.59). The yuan at 6.4970 is strengthening again – the September high was 6.4345. The economic calendar is busy today mainly with manufacturing PMI data. Data already out shows a rebound in the Caixin manufacturing PMI to 51.5, from 50.8, which bodes well for the global economy, but it is in Europe where PMI numbers either side of 60 are showing real strength. Base metals look well placed to advance further as concerted global growth underpins broad based demand. There is a danger that prices run ahead of the fundamentals, but with the longer-term outlook bullish the bull run may continue as traders anticipate stronger fundamentals down the road. While palladium’s rally continues, backed by fundamentals, the other precious metals are rebounding in what looks like a broad-based rally in metal commodities and the weaker dollar is helping in that respect too.