Commodities trading outlook: gold, silver and copper futures

Copper futures rose on Monday, but gains were held in check after a private gauge of Chinese manufacturing output came in below expectations, curbing demand prospects in the worlds largest consumer of the metal. Meanwhile, gold futures plunged to one-month low, amid expectations US interest rates will rise next year, while silver hovered bear its weakest level in more than a month.

On the Comex division of the New York Mercantile Exchange, copper futures for settlement in May rose by 0.36% to trade at 2.961 a pound by 12:53 GMT. Prices shifted in a daily range between $2.966 and $2.922 a pound. On March 19, prices touched $2.877 a pound, the weakest level since July 2010. The metal has lost 13% so far this year.

HSBC Holdings Plc and Markit Economics reported preliminary data on their purchasing managers index, which came in at 48.1 in March, trailing analysts estimates of an increase to 48.7 and down from a final reading of 48.5 in February. A value below the key level of 50.0 is indicative of contraction in the sector.

“Copper again followed China’s economic data,” said Kazuhiko Saito, a Tokyo-based analyst at commodities broker Fujitomi Co., cited by Bloomberg. “The HSBC manufacturing data deepened concern that China’s slowing growth will weaken demand for commodities”, he added.

Meanwhile, on the Comex division of the New York Mercantile Exchange, gold futures for settlement in April fell by 1.5% to trade at $1 316.10 an ounce by 12:54 GMT. Prices shifted in a daily range between $1 334.90 an ounce and $1 315.20 an ounce.

Bullion has retreated from a six-month high of $1 392.60 an ounce on March 17 as turmoil over Ukraine left Russia and the West involved in their worst conflict since the end of the Cold War. The precious metal slid 3.5% last week, the most since the week ended November 22, after the Federal Reserve announced on March 19, its third $10 billion reduction in the monthly bond-buying program to $55 billion per month.

While gold is up 10% this year amid concern the economic growth of the US may be slowing momentum and amid unrest in Ukraine, Goldman Sachs Group Inc. forecast further declines as the world’s biggest economy rebounds.

Jeffrey Currie, Goldman’s head of commodities research, said in a Bloomberg News interview this month that there are increasing chances, prices would reach $1,000 for the first time since 2009.

Elsewhere on the Comex, silver futures for May delivery fell 0.9 percent to trade at $20.127 an ounce by 12:55 GMT. Earlier, the price touched $20.045 an ounce, the weakest level since February 11. Platinum futures for July delivery traded little changed at $1 436.65 an ounce. Palladium futures for June delivery advanced 0.9 percent to $796.40 an ounce. Earlier, the price reached a one-year high of $802.40 an ounce, the strongest level in 2-1/2 years amid concern the sanctions on the largest supplier of the metal, Russia may reduce supplies.