Commodities trading outlook: gold, silver and copper futures

Gold futures slid to a three-week low as Federal Reserve officials signaled a rise in interest rates may be expected by mid-2015, boosting the US dollar and curtailing demand for the precious metal. Meanwhile, copper futures hovered near the weakest level since July 2010, also pressured by a stronger US dollar, while silver declined to a more than one-month low.

On the Comex division of the New York Mercantile Exchange, copper futures for settlement in May fell by 1.61% to trade at 2.939 a pound by 12:57 GMT. Prices shifted in a daily range between $2.995 and $2.914 a pound. Yesterday prices touched $2.877 a pound, the weakest level since July 2010.

The Federal Reserve revised its forecasts yesterday, showing more policy makers predicted the main interest rate, now close to zero, would increase at least to 1% by the end of next year and 2.25% by the end of 2016, higher than previously forecast.

Policy makers trimmed the bond-buying program by another $10 billion to $55 billion per month. Moreover, Federal Reserve Chair Janet Yellen, said that the first increase in borrowing costs should come “around six months or that type of thing” after the end of the stimulus program. The monetary easing program is expected to be brought to an end this fall.

The U.S. dollar index, which measures the greenback’s performance against a basket of six major counterparts, rose by 0.34% to 80.40 by 12:29 GMT. The June contract surged to a session high of 80.47, the strongest level since February 27, while days low was touched at 80.06. Strengthening of the greenback makes dollar-denominated commodities more expensive for foreign currency holders and limits their appeal as an alternative investment.

Copper prices were also pressured after a gauge of Chinese equities listed on the Hong Kong Stock Exchange entered a bear market amid concern the economy of the worlds top consumer of the metal is faltering.

Meanwhile, gold futures slid to a three-week low after the Fed signaled a rise in interest rates may be expected by mid-2015.

On the Comex division of the New York Mercantile Exchange, gold futures for settlement in April traded at $1 323.40 per troy ounce at 12:58 GMT, down 1.34% on the day. Prices shifted in a daily range between $1 335.00 an ounce and $1 321.10 an ounce, the weakest level since February 28.

Elsewhere on the Comex, silver futures for May delivery fell 2.6 percent to trade at $20.285 an ounce by 12:52 GMT. Earlier the price touched $20.142 an ounce, the weakest level since February 13. Platinum futures for April delivery dropped 0.9 percent to $1 438.30 an ounce. The price fell for the fourth straight session, the longest losing stretch in six weeks. Palladium futures for June delivery declined 2.35 percent to $750.20 an ounce. On March 14, the price reached a one-year high of $787.60 an ounce as tension between the largest palladium producer Russia and Ukraine escalated.