Commodities trading outlook: gold, silver and copper futures

Gold and silver futures were slightly higher during midday trade in Europe today, ahead of highly anticipated Yellen speech. Meanwhile, copper futures were lower.

Gold futures for delivery in August traded for $1 309.1 per troy ounce at 13:22 GMT on the COMEX in New York today, up 0.18%. Daily high and low stood at $1 314.4 and $1 306.4 per troy ounce, respectively. The contract dropped 2.30% yesterday, after it added about 1.2% last week, when a three-month high of $1 346.8 per troy ounce was reached.

Meanwhile, silver contracts for September stood at $20.995 per troy ounce, for a gain of 0.39%. Daily high and low were at $21.070 and $20.885 per troy ounce, respectively. The silver contract lost 2.55% on Monday, after adding about 1.5% last week, also reaching a four-month peak at $21.630 per troy ounce.

US retail sales for June were reported today, with the main gauge logging slightly below expectations at 0.2% monthly growth, while core sales were up 0.4%. Retail sales are a leading indicator of consumer spending, which generates about 80% of US GDP.

Janet Yellen, head of the Federal Reserve, will deliver her semi-annual monetary-policy testimony to the Senate and the House later today, as she explains monetary policy decisions.

The Fed’s last 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.

Stocks, dollar

US stocks gained on Monday, reversing most of last week’s losses, with all three major indices closing considerably higher. S&P 500 gained 0.48% as Wall Street trading closed on Monday, Dow 30 added 0.66%, while Nasdaq 100 was up 0.64%.

Meanwhile, assets at the SPDR Gold Trust – the largest gold-backed exchange-traded fund, added more than 8 tons on Monday for to stand at 808.73 tons, to total some 25 tons in gains over the last month. Assets were recently pressured to multi-year lows by a recovering US economy.

The US Dollar Index, which measures the greenback’s performance against six other major currencies, dropped 0.02% on Monday, after some 0.15% were lost last week. By 8:10 GMT today the gauge was down 0.01% at 80.22.

Copper

Copper futures for settlement in September dropped 0.12% to trade at $3.2450 per pound at 13:03 GMT today on the COMEX in New York. Prices shifted in a daily range between $3.2235 and $3.2550 per pound. The contract lost 0.61% on Monday, after dropping about 0.4% last week.

“The fundamentals are some of the best across the commodity spectrum, so it’s hard to be too negative,” Nic Brown, head of commodities research at Natixis SA in London, said for Bloomberg. “A temporary pullback would be appropriate after the recent run-up, but I suspect that there will be lots of interest to buy at lower levels, which should limit any potential downside.”

Previously, Citigroup Inc. increased its 2014 copper price forecast to $6 940 a ton from $6 785, pointing out the growing pace of China’s power grid and railroad expansion.

China is the world’s leading consumer of industrial metals, accounting for about 40% of total copper demand.