Commodities trading outlook: gold, silver, copper futures

Both gold and silver were steady after yesterdays losses as poor housing data for the US overcame strong figures in consumer inflation and retail sales, though upbeat industrial figures soon halted the rising price of precious metals. Copper also rallied on China meeting GDP growth expectations and on US industrial output.

On the COMEX division of the New York Mercantile Exchange, gold futures for settlement in June traded at $1 300.50 per ounce at 14:21 GMT, up 0.02%. During the day price fluctuated between $1 307.10 and $1 293.50. Yesterday the yellow metal lost 2.05% – the biggest drop in 16 weeks, achieving a complete reversal of the gains for the last two weeks.

Meanwhile, silver futures for delivery in May added 0.49%, reaching $19.585 per ounce. Daily high and low were at $19.805 and $19.325 respectively. The daily gain countered yesterdays drop of 2.6% – the biggest decline in more than five weeks.

The strong figures in the monthly industrial production report for the US was quick to boost the dollar, halting the rising price of gold and silver. Figures for March were better-than-expected and marked a 0.7% increase, beating forecasts of a 0.5% growth, recording a second straight month of expansion. Also, Februarys figure was revised from a 0.6% to show a 1.2% growth – the highest in 5 months, indicating a strong industrial period for the US.

Earlier today worsening housing figures in the US provided a boost to precious metals. Building permits for March fell 2.4%, trailing the forecast of a 0.6% growth, and well below last months performance of 7.3% growth. Additionally, housing starts added 2.8% to a 946,000 annualized rate, though far behind the expected rate of 6.4%. Also, work on single-family properties in March rose by 6% year-on-year to 635,000, but multifamily projects dropped 3.1%.

Dana Saporta, director of U.S. Economics research at Credit Suisse, New York, said for Bloomberg: “Housing will contribute positively to GDP this year, but not nearly as much as in 2012 and 2013… We are seeing continued improvement in housing starts, but at a slower pace.”

Previously, strong data on retail sales and consumer inflation in the US, alongside reports of declining consumer demand in China gave precious metals a strong downward push, with some prices falling to the lowest in a month.

Copper futures

Copper futures for delivery in May were sold at $3.0405 per pound at 14:24 GMT, a jump of 1.77% for the day – the biggest daily gain in nearly three weeks. Prices plunged nearly 2% on Tuesday to settle at $2.9875 a pound.

Most impact on copper pricing had the US industrial output report, which revealed a better-than-expected result for March, though inferior to Februarys reading.

Earlier in the day, China – the country consuming nearly 40% of the worlds copper, revealed figures on GDP growth for the first quarter to be on-level with expectations, strengthening current demand expectations for the red metal. Some gains were made, but overall the down-trend in Chinese growth seems strong.

Additionally, the People’s Bank of China reported that money supply grew at the slowest rate on record, fueling fears of a larger-than-expected slowdown. The Chinese M2 Money Stock rose at an annualized 12.1% pace, failing to meet analysts’ projections for 13.0% growth, down from the preceding period’s 13.3%.

Stephen Green, head of Greater China research at Standard Chartered Plc in Hong Kong, said for Bloomberg: “All the forward-looking indicators are weak – growth is going to continue to slow… We expect a mix of moderate monetary easing over the next few months and more aggressive reform measures.”