Commodities trading outlook: gold, silver and copper futures

Gold and silver futures recovered some earlier losses during midday trade in Europe today, as the US posted some discouraging data, pressuring the dollar and supporting havens. Meanwhile, copper futures were lower after a sizable recent increase.

Gold futures for delivery in August traded for $1 319.7 per troy ounce at 12:44 GMT on the COMEX in New York today, down 0.12%. Daily high and low stood at $1 322.0 and $1 305.4 per troy ounce, respectively. The contract added 0.22% yesterday, reaching a two-month high at $1 326.6 per troy ounce, after a further 0.14% gain on Monday.

Meanwhile, silver contracts for July stood at $21.000 per troy ounce, for a drop of 0.20%. Daily high and low were at $21.050 and $20.705 per troy ounce, respectively. The contract added 0.61% yesterday to reach a three-month high of $21.170 per troy ounce, after dropping 0.16% on Monday.

“The correction from the highs has continued with some good selling seen in Asia,” David Govett, the head of precious metals at Marex Spectron Group in London, wrote today in a report cited by Bloomberg. “We have probably seen the highs for the time being, in the absence of any fresh geopolitical problems.”

US reports

The US posted several key economic reports today. Durable goods orders for May were logged at -1.0% on a monthly basis, while core orders, which exclude transportation items, were also negative at -0.1%.

The final reading on GDP for Q1 was also revealed. The standing was far below the expected contraction of 1.8% at -2.9%, which is also the worst quarterly growth since Q1 of 2009.

“I do not think that the first-quarter GDP report is a reflection of the economy’s underlying health,” Russell Price, senior economist at Ameriprise Financial Inc. in Detroit, said for Bloomberg before the report. “The employment numbers have been pretty solid, we’ve seen early signs of growth in wages, and that is really what’s going to drive demand. That will bring the rest of the economy with it.”

Markit will post its preliminary reading on US services PMI for June later today. Experts suggest a standing of 58.6 after 58.1 in May. A reading of 50 or higher means expansion, and vice versa. The greater the distance from 50, the more sizable an expansion or contraction.

The services sector accounts for about 80% of US GDP.

Previously, the German Ifo institute posted slightly worsening business climate for July in the Eurozone yesterday, while the Conference Board released its reading on US consumer sentiment, for a sizable increase since June.

US housing data was also revealed yesterday. New home sales annualized rate in May stood for a massive 18.1% gain on a monthly basis, at 504 000 sales since a year ago, after Monday saw an increase for existing home sales as well.

The real estate industry accounts for nearly 13% of US GDP.

Copper

Copper futures for settlement in July dropped 0.30% to trade at $3.1415 per pound at 12:44 GMT today on the COMEX in New York. Prices shifted in a daily range between $3.1375 and $3.1555 per pound. The contract added 0.05% yesterday, after a further 0.90% gain on Monday.

Copper imports in top-consumer China, which accounts for 40% of world demand, dropped 17% in May, a government report revealed earlier this week.

“China’s trade data showed a slowdown in the country’s demand for metals, clouding the demand outlook,” Kazuhiko Saito, analyst at Fujitomi Co., said for Bloomberg.

Previously, HSBC released its preliminary reading on China’s manufacturing PMI for June on Monday. The figure surprisingly beat expectations to stand at 50.8, to log the first monthly expansion in the factory sector since January. Later this week, Chinese industrial profits will be reported on Friday.

The industrial sector accounts for nearly half of Chinese GDP and the bulk of copper demand.