Commodities trading outlook: gold, silver and copper futures

Gold futures were relatively leveled during midday trade in Europe today, while silver gained, as the US posted somewhat disappointing factory data. Earlier, the EU also revealed slowing expansion of industrial activities. Meanwhile, copper futures capitalized on growing factory activities in top-consumer China. Crucial reports are due this week, including payrolls in the US and a majorly important interest rate decision by the European Central Bank.

Gold futures for delivery in August traded for $1 246.8 per troy ounce at 14:35 GMT on the COMEX in New York today, up 0.06%. Daily high and low stood at $1 251.0 and $1 241.1 per troy ounce, respectively, reaching the lowest level in four months. On Friday the contract closed for a 3.69% loss, following a rally for US stocks in light of positive economic data.

Meanwhile, silver contracts for July stood at $18.810 per troy ounce, for an increase of 0.69%. Daily high and low were at $18.870 and $18.650 per troy ounce, respectively. Last week the contract dropped 3.84%, pushing a four-year low at $18.615 per ounce.

Economic reports

This week

Earlier today, the EU posted final standings for Mays manufacturing PMI. Germany scored lower than expected at 52.3, after 52.9 for April, while France logged a slight improvement at 49.6, to beat expectations of a 49.3 standing. Meanwhile, the Eurozone, as a whole, posted 52.2, below the 52.5 figure for the previous month. Any reading below the boundary of “50″ means a contraction, and anything above it means expansion. The bigger the distance from 50, the greater the pace of expansion or contraction.

Also today, ISM posted its May manufacturing PMI report for the US. After two corrections, the figure was recorded at 55.4, improving on Aprils standing of 54.9. Factory employment index was logged at 52.8, disappointing analysts, and standing far below the 54.7 figure for the previous month.

Tomorrow several more reports are due. The EU is expected to reveal unemployment rate for April in the Bloc remained unchanged at 11.8%. The preliminary figure for May CPI in the Eurozone is forecast at an unchanged 0.7% on a yearly basis, while Core CPI probably dropped to 0.9% on an annual basis.

Also tomorrow, US factory orders for April will be reported. Analysts project a reading of 0.6% monthly growth, after 0.9% in March.

Later this week, on Wednesday the EU will report on May PMI and Q1 GDP, while the US will post services PMI and a nonfarm employment report. On Thursday, the EU will reveal retail sales and a crucial ECB interest rate decision. Friday will close the week with reports for industrial production in Germany, and key data on payrolls in the US.

“I suspect the market will remain in the doldrums, with rallies being sold, before the European Central Bank’s policy meeting and U.S. jobs data due this week,” David Govett, head of precious metals at Marex Spectron Group in London, said today, according to Bloomberg.

Previously

A string of reports from the US last week boosted sentiment, for stocks to stand record high.

On Friday, reports showed a slight increase for personal income and a minor decrease in spending, while Chicago PMI added well above expectations, while Michigan’s consumer sentiment was unchanged. Earlier data on durable goods orders, consumer confidence and services PMI scored much better than expected, significantly boosting sentiment for the US economy.

“The risk status of gold has lessened somewhat,” said for Bloomberg Jonathan Barratt, chief investment officer at Ayers Alliance in Sydney. “There’s really no major issues out there that warrant it, you can deploy your funds elsewhere and that’s what people are doing.”

Stocks, SPDR assets

US stocks slid today, after ISM revealed manufacturing data for the US today. By 14:09 GMT S&P had lost 0.40%, Dow 30 dropped 0.20% and Nasdaq 100 was down 0.66%. Previously, stocks were boosted to record highs by positive US data last week. Standard&Poor 500, the broadest major index, closed last week’s Wall Street session for an all-time high of 1 923.57, after a 1.21% gain. Nasdaq 100, which excludes financial institutions, also recorded the highest close in history on Friday at 3 736.82, adding 1.61% for the week. Dow 30 Industrial increased by 0.67% to close for the record-breaking 16 717.17.

Elsewhere, European stocks were also record high. Dow Jones Euro Stoxx 50 reached the all-time high of 3256.00 earlier today, ahead of economic data, but was lower by 0.14% at 14:10 GMT.

Elsewhere, assets at the SPDR Gold Trust – the largest gold-backed exchange-traded fund, remained unchanged for a third day on Friday, after regaining some 9 tons to stand at 785.28 on Tuesday. Previously, holdings were at 776.89 tons, the lowest level since December 2008. The fund had lost over 30 tons in the last month, until Tuesday, as investor interest in havens diminishes, pressured by the growing US economy.

Ukraine

Hundreds of armed rebels press on with the attack on a military base, near the Russian-Ukrainian border in the region of Luhansk, Ukrainian news agency UNIAN reported. Border troops have sustained injured, but have reportedly repelled the initial assault.

Last week Ukraine saw some of the fiercest fighting since the conflict began earlier this year. Yesterday rebels shot down a military helicopter, killing at least 12 Ukrainian soldiers, including a high-ranking general, who headed special-combat training for the newly created National Guard. On Monday, separatist fighters assaulted Donetsk airport, only to suffer more than 100 dead, according to the “Donetsk People’s Republic” press office.

Copper

Copper futures for settlement in July added 1.30% to trade at $3.1640 per pound at 14:28 GMT today on the COMEX in New York. Prices shifted in a daily range between $3.1320 and $3.1730 per pound. Last week the contract the metal lost 1.39%, though it reached the highest level in almost three months at $3.1925 per pound.

Copper futures were strongly supported during trade in Europe today, after a positive factory report from China on Sunday. Yesterday China, which accounts for 40% of world copper consumption, posted manufacturing PMI for May, logging 50.8, improving on April’s 50.4, and exceeding forecasts of a standing of 50.6, meaning activities are picking up pace of expansion.

Previously, major exchanges recorded multi-year lows of tracked copper volumes, which alongside booming demand in China, which accounts for 40% of all copper consumption, bumped up the red metal.