Commodities trading outlook: gold, silver and copper futures

Gold contracts in New York traded even today, after yesterday signs of deescalation in Ukraine suppressed safe-haven demand. Data from the US continues to push down on the precious metals. Meanwhile, copper futures, also in New York, found support from foreign trade data from China.

Gold futures due in June traded for $1 290.4 per troy ounce at 13:52 GMT on the COMEX in New York today, adding 0.12% to Wednesdays closing price. Daily high and low stood at $1 295.5 and $1 284.8 per troy ounce. Yesterday the contract lost 1.51% after a softening tone from the Kremlin pressured safe-haven demand.

Meanwhile, silver futures for July, the most traded silver contract in New York, stood at $19.275 per troy ounce, marking a 0.35% fall for the session so far. Prices ranged from $19.140 to $19.390 per troy ounce.

Rebel activists were quoted by Russian news agency RIA Novosti as saying they will go ahead and hold the planned independence referendum, despite Russia’s Vladimir Putin urging a delay, the BBC reported. “The referendum will take place on 11 May. We are getting ready, ballot papers are being printed, everything remains in force. Nothing will change, it will not be delayed,” pro-Russian rebels in Luhansk were quoted as saying.

Yesterday, Russian President Vladimir Putin made some steps towards reducing tensions in eastern Ukraine as he proposed separatists postpone the planned independence referendum in Donetsk and Luhansk regions. President Putin went on to add that the presidential election due on May 25th is a step in the right direction, though previously Russian Foreign Minister Sergei Lavrov urged the vote be put-off, in light of the violence in the country. The Kremlin also announced that it is withdrawing troops away from the border, though any Ukrainian or NATO officials have yet to confirm.

The crisis in Ukraine helped precious metals gain more than 9% this year, as safe-haven demand increases in proportion to geopolitical risks in Eastern Europe.

US economy

A report on jobless claims, a significant indicator for the health of the US economy, revealed unemployment figures had scored better than expected for the week through May 3rd. Initial claims were at 319 000, down from a revised 345 000 for the previous week, while continuing claims had shrunk to 2.685 million from 2.761 million the previous week.

Yesterday Fed’s Chair Janet Yellen testified that the Federal Reserve will continue supporting the economy. She said that the US recovery was still fragile and could be threatened, arguing that the central bank should continue to apply the stimulus program for some time. “Many Americans who want a job are still unemployed… and inflation is below the central bank’s 2% target,” she said.

Previously, a number of reports had fomented bullish sentiment for world’s largest economy. Exports for March registered the second-highest level on record, a report on Tuesday revealed. Earlier, reports on employment, consumer spending, industrial and services outlooks all generated positive vibes, outscoring expectations and improving on previous figures.

Assets at the SPDR Gold Trust – the largest bullion-backed exchange-traded fund, remained at the lowest point since January 2009 of 782.85 tons for the fourth day yesterday. The fund has lost 10 tons last week. The discouraging outflow suggests investor interest in the precious metal is at a multi-year low, as the world economy recovers.

Copper futures

Copper futures for settlement in July rose by 0.81% to trade at $3.0570 per pound at 13:53 GMT in New York. Prices ranged between $3.0275 and $3.0695 a pound.

The US economy continued to score improving results. The report on jobless claims for the week through May 3rd added to last weeks multi-year high figures on unemployment to confirm positive outlooks for the worlds largest economy.

China also offered support for copper, as a report earlier today showed foreign trade had improved significantly in April. Both exports and imports beat expectations of contraction to mark slight gains at 0.9% and 0.8%, respectively. Trade balance had also improved on forecasts to settle at a $18.45 billion surplus, more than double that of March. Copper imports increased by 7.2% on a monthly basis to reach 450 000 tons.

China accounts for 40% of the world’s copper consumption, and negative outlooks pressure contracts, and vice versa.

Previously, HSBC’s final reading for April’s manufacturing PMI of China put the figure at 48.1, marking the fourth month in a row to register a contraction in factory activity. The reading is also behind the preliminary standing at 48.3, and below the government’s 50.3 index, which also fell short of expectations.