Commodities trading outlook: gold, silver and copper futures

Gold and silver futures were lower during midday trade in Europe today, as the US posted soaring employment figures. Traders await key reports from the US and Eurozone to make bigger moves, while stocks and SPDR assets gained. Meanwhile, copper futures were higher ahead of US factory orders report.

Gold futures for delivery in August traded for $1 322.9 per troy ounce at 12:37 GMT on the COMEX in New York today, down 0.28%. Daily high and low stood at $1 330.4 and $1 322.1 per troy ounce, respectively. The contract added 0.35% on Tuesday, reaching a three-month high of $ 1 334.9 per troy ounce, after a further 0.15% gain on Monday.

Meanwhile, silver contracts for September stood at $20.985 per troy ounce, for a loss of 0.63%. Daily high and low were at $21.165 and $20.960 per troy ounce, respectively. The contract added 0.29% yesterday, also reaching a three-month high of $21.275 per troy ounce, after having dropped 0.37% on Monday.

US economy

The ADP National Employment Report was released today, revealing a shockingly improving payrolls figure for the US in June. New payrolls were reported at 281 000, some 40% over the estimated 200 000. ADP had reported a 179 000 figure last week, while the official standing was at 217 000. The official report for June is due tomorrow, and analysts suggest 210 000 – 213 000 payrolls and an unchanged 6.3% unemployment rate.

Also tomorrow, ISM will post its non-manufacturing PMI for June, and experts suggest accelerating growth in the services sector as well.

Previously, ISM revealed its June manufacturing for the US yesterday, for a slightly worse-than-expected growth, but sizable growth nonetheless.

Stocks

US stocks logged sizable gains during Tuesday’s session. S&P 500 added 0.67% as trading on Wall Street closed yesterday, for a record-high of 1973.32. Dow 30 logged a 0.77% gain, while Nasdaq 100 added 1.17% for an all-time-high close of 3894.33. Dow Jones Euro Stoxx 50 closed for a 0.63% gain.

Meanwhile, assets at the SPDR Gold Trust – the largest gold-backed exchange-traded fund, gained almost 6 tons on Tuesday and stand at 796.39 tons. The fund scored another massive gain of more than 5 tons on Monday, after adding 3 tons last week as well. Assets were recently pressured to multi-year lows by a recovering US economy.

“Two days of big flows into the fund is supporting prices,” said one Hong Kong-based trader, cited by Reuters. “This is a good sign as physical demand in Asia is weak because of the rise in prices.”

The US Dollar Index, which measures the greenback’s performance against six other major currencies, was up 0.04% yesterday, losing about 0.8% over the previous six sessions. At 12:27 GMT today the gauge was up 0.20% at 80.00, boosted by ADPs payrolls reading.

Eurozone

The Eurozone also posted data on Tuesday. Unemployment rate for May was logged at an unchanged 11.6%, while manufacturing PMI also for May was at 51.8, slightly below expectations, but still standing for an expansion. 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.

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 September added 0.91% to trade at $3.2330 per pound at 12:37 GMT today on the COMEX in New York. Prices shifted in a daily range between $3.1830 and $3.2380 per pound. The contract was little changed yesterday, while so far this week it has added more than 1%.

Two separate reports on manufacturing PMI for June in China, where 11% of all oil is consumed, were released earlier this week. HSBC confirmed its positive reading for the factory sector, logging a 50.7 reading, after its preliminary 50.8 of last week. 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.

Meanwhile, the Chinese government posted its own reading on June’s manufacturing PMI, for a standing of 51.0.

Thursday will see services PMI readings, again from both sources.

Elsewhere, US factory orders for May will also be revealed later today, and analysts suggest a -0.3% figure on a monthly basis, after the 0.7% growth in April.