Commodities trading outlook: gold, silver and copper futures

Gold and silver futures were lower during midday trade in Europe today. Stocks and the US dollar scored sizable gains last week, as US payrolls thrashed expectations and lifted sentiment for the world’s top economy. Meanwhile, copper futures were also lower, after a massive gain last week.

Gold futures for delivery in August traded for $1 315.7 per troy ounce at 12:50 GMT on the COMEX in New York today, down 0.42%. Daily high and low stood at $1 321.7 and $1 313.1 per troy ounce, respectively. The contract added about 0.2% last week, reaching a three-month high of $1 334.9 per troy ounce.

Meanwhile, silver contracts for September stood at $21.015 per troy ounce, for a drop of 0.87%. Daily high and low were at $21.215 and $20.935 per troy ounce, respectively. The silver contract also added about 0.2% last week, and also reached a three-month high of $21.335 per troy ounce.

“Gold is under pressure from the dollar as the U.S. economy continues to show signs of improvement,” Zhu Siquan, an analyst at GF Futures Co. in Guangzhou, China, said for Bloomberg. “Prices remain in range as there are still uncertainties in the rest of the world.”

Minutes from the Federal Open Market Committee (FOMC) June meeting will be released this Wednesday. The log is closely monitored by traders, since it reveals the plans and direction of the US most-senior monetary policy body.

The meeting, which took place some three weeks ago, resulted in decisions to keep the benchmark lending rate unchanged at 0.25%, while reducing assets purchases through its monetary stimulus program by another $10 billion to $35 billion a month, expressing limited confidence in the US economic recovery.

US economy

Key US employment data was revealed last week. Nonfarm payrolls for June increased by 288 000, which is a four-year peak. ADP posted a 281 000 figure on Wednesday, and analysts had earlier suggested a growth of about 210 000. The unemployment rate dropped to 6.1%, which is the lowest rate since September 2008.

US stocks logged sizable gains during Thursday’s session, which was the last for the week due to the July 4 holiday. S&P 500 added 0.55% as trading on Wall Street closed for the week, for a record-high close of 1985.44. Dow 30 logged a 0.55% gain, also closing record-high at 17 068.26, while Nasdaq 100 added 0.61% for an all-time-high close of 3923.01. Dow Jones Euro Stoxx 50 closed for a 1.01% gain.

The US Dollar Index, which measures the greenback’s performance against six other major currencies, unchanged on Friday, and logged a weekly gain of 0.25%, bolstered by the payrolls figure. By 8:56 GMT today the gauge was down 0.03%.

Copper

Copper futures for settlement in September dropped 0.29% to trade at $3.2610 per pound at 12:49 GMT today on the COMEX in New York. Prices shifted in a daily range between $3.2370 and a four-month peak of $3.2745 per pound. The contract added about 4% last week, boosted by positive US and Chinese economic data.

“We likely have done a little too much, too quickly,” Edward Meir, analyst at INTL FCStone Inc. in New York, wrote in a note cited by Bloomberg, addressing last weeks advance. “We could see prices push a little higher over the course of July, although we suspect that the bulk of the move is likely behind us.”

In addition to the US employment figures, China revealed data earlier last week, for a sizable increase in confidence in the factory sector, which accounts for nearly half of Chinese GDP and the bulk of copper demand.

China and the US consume more than half of all copper in the world.