Commodities trading outlook: gold, silver and copper futures

Gold and silver futures were higher during afternoon trade in Europe today. Stocks continued to gain, as trading opened on Wall Street. Meanwhile, copper futures were lower, amid concerning news from China, ahead of key data later this week.

Gold futures for delivery in August traded for $1 254.4 per troy ounce at 14:08 GMT on the COMEX in New York today, up 0.15%. Daily high and low stood at $1 257.3 and $1 251.6 per troy ounce, respectively. On Friday the contract closed for a 0.5% weekly gain.

Meanwhile, silver contracts for July stood at $19.095 per troy ounce, for an increase of 0.55%. Daily high and low were at $19.190 and $18.985 per troy ounce, respectively. Last week the contract added about 1.5%.

“There may be some buying interest at these lower levels,” Xia Yingying, analyst at Nanhua Futures Co., said for Bloomberg. “Risks for gold prices still lie to the downside as the U.S. economy continues to show signs of improvement.”

US economy

On Friday, the US posted key employment data for May. New nonfarm payrolls stood at 217 000, as predicted, after 288 000 were added in April. Unemployment rate stood same as last month at 6.3%, which is the lowest level since September 2008, beating expectations of a slight increase.

Earlier, on Thursday the weekly jobless claims report for the seven day through May 31 was posted. Initial applications for unemployment benefits increased more than expected to 312 000, after 300 000 were logged for the previous week. Meanwhile, continuing claims for the week ended May 24 were reported at 2.603 million, improving on expectations and on the previous standing.

Previously, ISM reported significantly growing manufacturing and services sectors in the US, boosting sentiment for the world’s top economy.

This week will feature more data from the world’s top economy. Retail sales are expected to post a preliminary 0.4% monthly growth for May, after muted 0.1% increase the previous month. Also, PPI for May will be revealed, and analysts project a 0.3% gain on a monthly basis and 1.9% year-on-year.

Stocks

US stocks were relatively steady as Wall Street opened Mondays session. Previously, S&P added 0.46% on Friday and logged more than 1% weekly increase with the record-high close of 1949.44. Nasdaq 100, which excludes financial institutions, also registered the highest close on record at 3794.57, with a daily gain of 0.47% and a weekly growth of more than 1.5%. Dow 30 Industrial was at 16 924.28, also at an all-time high, after a 0.52% daily gain and a total of 1% for the week.

Elsewhere, Dow Jones Euro Stoxx 50, a gauge of European stocks, also scored the highest close of all time on Friday. The index stood at 3291.98 after a daily gain of 0.75% and a weekly increase of more than 1.5%. Today, by 14:05 GMT the gauge stood for a 0.03% gain.

“Right now, nobody wants to play big on gold because they are all looking at equities,” said a precious metals trader, cited by Reuters. “With consumer demand also weak and the Ukraine situation quiet, there aren’t much bids out there for gold.”

Copper

Copper futures for settlement in July fell by 0.44% to trade at $3.0375 per pound at 14:08 GMT today on the COMEX in New York. Prices shifted in a daily range between $3.0185 and $3.0595 per pound, reaching a monthly low. Last week the contract lost more than 2%.

Early on Sunday, China, which consumes 40% of all copper, revealed foreign trade data. Exports beat forecasts to log a 7.0% annual growth for May. However, imports surprisingly dropped to -1.6% on an yearly basis, down from -0.8% for April, and well below expectations for a 6% growth standing. Inbound copper was down by quite a sizable margin, with ore and concentrates imports reaching the lowest level in a year, while unwrought copper dropped 16%.

Furthermore, an ongoing criminal investigation in the port of Qingdao, China, has been a sizable force on copper contracts as of recently. The probe is in address to a possible lending fraud, linked with copper consignment. The inquiry has prompted a retreat for the red metal, as investors sold assets on the physical market in China, in anticipation of further crackdown on copper deals. Additionally, institutions have become more reluctant to offer financing to metals ventures, with at least one bank stopping new metal financing deals, Reuters reported.

Later this week, Chinese industrial production for May will be posted on Friday. Experts suggest a steady 8.8% growth year-on-year, after 8.7% in April. Also due on Friday, reports on fixed assets investments and retail sales for May are expected to reveal steady annual growth for both.