Commodities trading outlook: gold, silver and copper futures

Gold and silver futures were relatively steady during midday trade in Europe today. Stocks closed lower on Thursday, as the US posted some slightly worse-than-expected data. Meanwhile, copper futures were also little changed.

Gold futures for delivery in August traded for $1 318.5 per troy ounce at 12:52 GMT on the COMEX in New York today, up 0.11%. Daily high and low stood at $1 323.1 and $1 313.2 per troy ounce, respectively. The contract dropped 0.42% yesterday, and so far this week gold has been relatively unchanged, reaching a two-month high of $1 326.6 per troy ounce on Monday.

Meanwhile, silver contracts for July stood at $21.090 per troy ounce, for a drop of 0.09%. Daily high and low were at $21.205 and $20.960 per troy ounce, respectively. The contract lost 0.04% yesterday, and so far this week has gained about 0.8%, reaching a three-month high of $21.170 per troy ounce on Monday.

US economy

Several readings on the US economy were reported yesterday. Jobless claims were slightly worse than a week earlier, while personal spending and income for May were slightly better than before, at 0.2% and 0.4% growth, respectively. Personal income and spending are leading indicators for consumer spending, which accounts for nearly 80% of US GDP.

Previously, the US posted some worse-than-expected data on Wednesday. Q1 GDP growth was far below the expected contraction of 1.8% at -2.9%, which is also the worst quarterly growth since Q1 of 2009. Durable goods orders for May also scored below par, though the negative sentiment was largely already priced. Also, Markit posted its preliminary reading on US services PMI for June, for a standing well above expectations at 61.2. 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.

Stocks

US stocks closed lower on Thursday, logging the below-par data from the US. S&P 500 dropped 0.12%, Dow 30 logged a 0.13% loss, while Nasdaq 100 was down 0.01%, after the all-time-high close of 3827.33 on Wednesday. Dow Jones Euro Stoxx 50 closed for a 0.76% drop on Thursday, and by 8:12 today was up 0.36%.

Meanwhile, assets at the SPDR Gold Trust – the largest gold-backed exchange-traded fund, were unchanged on Thursday at 785.02 tons, after adding some 3 tons earlier. The fund lost more than 4 tons last week, and is orbiting multi-year lows amid a recovering US economy.

Copper

Copper futures for settlement in July dropped 0.05% to trade at $3.1640 per pound at 12:52 GMT today on the COMEX in New York. Prices shifted in a daily range between $3.1540 and $3.1770 per pound. The contract dropped 0.05% yesterday, and so far this week copper has gained about 1.4%.

China, which accounts for 40% of total copper consumption, posted industrial profits for May, for a standing of 8.9% growth on an annual basis, after 9.6% were logged in April. Earlier in the week, HSBC revealed its surprisingly positive reading on Chinese manufacturing PMI. The industrial sector accounts for nearly half of Chinese GDP and the bulk of copper demand.

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

“There is a lot to be worried about in China, even though flash PMI data was more encouraging this month,” Adams added.