Commodities trading outlook: gold, silver and copper futures

Gold and silver futures steadied at lower levels during midday trade in Europe today, ahead of several US economic reports. Stocks and the dollar advanced on Wednesday. Meanwhile, copper futures surged, boosted by positive readings for top-consumer China.

Gold futures for delivery in August stood at $1 300.5 per troy ounce at 11:41 GMT in New York today, down 0.32%. Daily high and low were at $1 305.6 and $1 295.2 per troy ounce, respectively. The contract lost 0.12% yesterday, and was down some 0.4% so far this week.

Meanwhile, silver futures for September traded for $20.945 per troy ounce, down 0.24%, daily high and low at $20.970 and $20.800 per troy ounce, respectively. The future lost 0.06% on Wednesday, and was up about 0.5% so far this week.

“Optimism about the health of the U.S. economy” and a stronger dollar reduced appetite for haven assets, Abhishek Chinchalkar, analyst at Mumbai-based AnandRathi Commodities Ltd., said in a report today, cited by Bloomberg. “Barring any sudden rise in geopolitical tension, risk appetite could continue positive. This in turn is likely to keep gold under a modicum of pressure.”

Economic outlooks

The Eurozone posted key data today. Both manufacturing and services PMI for the Bloc were logged quite higher than expected, at 51.9 and 54.4, respectively. Anything above 50 is read for an expanding sector, and anything below means contraction, with the higher the margin from 50, the greater the pace of either expansion or contraction.

Germany was again leading the rally, while France, while also logging slightly better than forecast, is still in the backwaters with a contraction for factories and only minor gains for services.

Several US figures will also be released today. New home sales have probably dropped 5.3% on a monthly basis in June, for an annualized rate of 475 000, analysts say before the report. New home sales added 18.6% in May. Elsewhere, initial jobless claims for the week ended July 19 have probably slightly increased to 310 000, while Markit’s preliminary US manufacturing PMI reading for July is expected at 57.5, slightly more than before.

Earlier, the US posted robust CPI and existing home sales figures, supporting stocks and the dollar.

Stocks, dollar

US stocks extended this week’s gains, with S&P 500 and Nasdaq 100 recording all-time highs on Wednesday, logging a total of 0.5% and 1.1% in gains, respectively, so far this week. Dow 30 lost 0.16%, however, and is down some 0.1% this week.

Meanwhile the US dollar index, which measures the greenback against six other major currencies, added 0.07% yesterday and is up about 0.4% this week. By 11:31 GMT the gauge was down 0.02% at 80.86, pressured by EU’s PMI readings, which boosted the euro.

Elsewhere, assets at the SPDR gold fund added half a ton yesterday, to stand at 805.44 tons. The fund is steadily regaining value, after being pressured to multi-year lows earlier this year.

Holdings in palladium-backed exchange-traded products are at or near records, Bloomberg said, as the metal reached a 13-year high last Thursday. By 11:34 GMT today palladium was down 0.03% for the day at $874.00 per troy ounce.

Copper

Copper futures for September delivery stood at $3.2605 per pound, up 1.67%. Prices ranged between $3.2020 and 3.2605 per pound. The contract dropped 0.03% yesterday, and was some 0.7% up for the week so far.

HSBC posted its preliminary reading on Chinese manufacturing PMI for July earlier today, to reveal a confident stance for the world’s top copper-consuming economy. The figure was logged at 52.0, well ahead of expected 51.0 and the highest standing in 18 months. Anything above 50 is read for an expanding sector, and anything below means contraction, with the higher the margin from 50, the greater the pace of either expansion or contraction.

“The better-than-expected China HSBC manufacturing PMI figure of 52 for July inspired gains in Asian equities and a rally across base metals,” Vicky Sanders, head of analytics sales at Marex Spectron Group in London, wrote in a note today, cited by Bloomberg.

Previously, the metal was pressured low enough to spur bargain hunting late last week, as China posted a slowdown in housing price inflation, while also reporting a sizable drop in copper imports.