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Commodities trading outlook: gold, silver and copper futures

Gold and silver futures were lower during afternoon trade in Europe today, as traders await important reports from the US and EU later this week. Meanwhile, copper futures were higher ahead of key reports from top-consumer China.

Gold futures for delivery in August traded for $1 316.8 per troy ounce at 14:27 GMT on the COMEX in New York today, down 0.24%. Daily high and low stood at $1 318.4 and $1 311.0 per troy ounce, respectively. The contract added about 0.2% last week, reaching a two-month high of $1 326.6 per troy ounce on Tuesday.

Meanwhile, silver contracts for July stood at $20.835 per troy ounce, for a drop of 1.15%. Daily high and low were at $20.980 and $20.765 per troy ounce, respectively. The contract gained some 0.6% last week, reaching a three-month high of $21.205 per troy ounce on Friday.

US economy

The US revealed several key readings today. Pending home sales for May were reported at a 6.1% monthly gain, while Chicago PMI for June was at 62.6, slightly below expectations and lagging behind Mays 65.5. A reading of 50 or higher means expansion of economic activities, and vice versa. The bigger the distance from 50, the greater the pace of contraction or expansion.

ISM’s final reading on manufacturing PMI for June will be released on Tuesday, with forecasts of accelerating growth for the factory sector of the US, before a separate report on May factory orders on Wednesday, which are also projected to have grown. ISM will post its non-manufacturing PMI for June on Thursday, and experts suggest accelerating growth in the services sector as well.

Thursday will feature the key report on employment for June. The unemployment rate is set for an unchanged 6.3%, while nonfarm payrolls have probably added 210 000 – 213 000, after a 217 000 figure for May. Payrolls are a leading indicator for the overall health of the economy.

Eurozone

The Eurozone posted a key preliminary reading on June CPI earlier today. Consumer prices were shown to have added just 0.5%, which was expected. Meanwhile, core CPI, which excludes food and energy, stood for a 0.8% increase.

Manufacturing PMI for June and unemployment rate for May will be posted on Tuesday, with expectations of little change in both. Thursday will see services PMI for June and retail sales for May, as well as a key European Central Bank (ECB) decision on the benchmark lending rate and deposit rates. The ECB cut both rates last time, for a 0.15% central lending rate and -0.10% deposit rate, which taxes commercial banks if they keep their money out of circulation.

Copper

Copper futures for settlement in July added 0.30% to trade at $3.1775 per pound at 14:27 GMT today on the COMEX in New York. Prices shifted in a daily range between $3.1620 and $3.1775 per pound. The contract gained about 1.3% last week.

HSBC, as well as the Chinese government, will release their separate readings on manufacturing PMI for June early on Tuesday. HSBC’s preliminary figure was surprisingly positive, at 50.8, and recently the government’s reports post a higher standing. Thursday will see services PMI readings, again from both sources.

“Ahead of the publication of key economic data, metal prices remain virtually unchanged ,” Daniel Briesemann, analyst at Commerzbank AG in Frankfurt, said in a report today, cited by Bloomberg.

Previously, 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.

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