Commodities trading outlook: gold, silver and copper futures

Precious metals gained as safe-haven demand grew with the rebels in Ukraine declaring the people in Donetsk and Luhansk voted in favor of secession. Moscow commented that it expects the will of the people to be implemented by authorities, while the West condemned the vote. Meanwhile, copper saw sizable support by speculation of easing investment restrictions in top-consumer China, which improved sentiment for the economy.

Gold futures due in June traded for $1 300.0 per troy ounce at 14:00 GMT on the COMEX in New York today, adding 0.96%. Daily high and low stood at $1 304.5 and $1 277.7 per troy ounce, respectively. The contract recorded a 1.17% loss last week, pressured by the recovering US economy.

Meanwhile, silver futures for July, the most traded silver contract in New York, stood at $19.595 per troy ounce, rising by 2.48% for the session so far. Prices ranged from $19.045 to $19.670 per troy ounce. The contract lost 2.64% over the last three sessions.

Separatists in Donetsk region in Eastern Ukraine have declared victory in the independence referendum, which took place on Sunday. They reported that 89% of voters backed self-rule, and said turnout was at 75%. Luhansk reported 96% of voters agree with self-rule.

Ukraine and the West have condemned the vote. The EU has expanded sanctions to include 2 more companies and 13 additional individuals, the names of which should be announced within 24 hours, the BBC reported. Moscow said it “respected the will of the people,” and that the results should be implemented.

Organizers said that all government troops will be considered “occupying forces”. Furthermore, the separatists plan to hold another vote in a week’s time on whether to join the Russian Federation, much like the Crimea did earlier this year.

US data

Last week a number of reports boosted positive outlooks for the US economy. Figures on employment and the services sector added to confidence for the world’s top economy. Previously, the Fed confirmed it will continue supporting the economy nonetheless.

US retail sales for April are to be reported on Tuesday, and are forecast to have added 0.4%, down from an upward-revised 1.2% growth for March, while core retail sales are expected to show a 0.6% growth after 0.7% the previous month.

Later in the week more data will be released, with PPI, CPI and housing data expected to mark improvement.

The recovery of the US economy weighs on precious metals, as it diverts investments away from commodities and towards the higher risk-rewards of equities, such as stocks. Additionally, a stronger greenback increases the cost of dollar-denominated goods.

Copper futures

On the COMEX division of the New York Mercantile Exchange, copper futures for settlement in July added 2.14% to trade at $3.1490 per pound at 14:02 GMT today. Prices shifted in a daily range between $3.0840 and $3.1555 a pound, reaching the highest price in two months.

Information that China will be easing investment limits for listed companies in the foreseeable future boosted confidence in the economy, prompting a surge in stocks, which was followed by copper. China consumes about 40% of the world supply of the industrial metal.

“The Chinese announcement is good for the market in the medium and long term and raises the government’s attention to the stock market to the state level,” said for Bloomberg Wu Kan, a fund manager at Shanghai-based Dragon Life Insurance Co., which oversees about $3.3 billion.

Early on Tuesday, a report on industrial production for April in China is projected to show the sector has grown by 8.7-8.9% on an annual basis, in line with the figure from last year of 8.8%. The figure stokes confidence in the market, after the quarterly growth for Q1 of 2014 was reported to be the worst for the last 18 months.

Previously, Chinese foreign trade had improved significantly in April, a report on Thursday revealed. Both exports and imports beat expectations of contraction to mark slight gains at 0.9% and 0.8%, respectively. Trade balance had also improved on forecasts to settle at a $18.45 billion surplus, more than double that of March. Copper imports increased by 7.2% on a monthly basis to reach 450 000 tons.

Elsewhere, reports on industrial production in the EU will be released later this week. Also, gauges for business conditions for New York and Philadelphia are due. Later in the week, important data on the US housing sector, which consumes the lion’s share of copper in the States, will be released, with expectations of significant growth.