Commodities trading outlook: gold, silver and copper futures

Gold and silver futures were steady during midday trade in Europe today, with the US in holiday for July 4. Surprisingly good payrolls data boosted the dollar and stocks yesterday. Meanwhile, copper futures were lower after gains for the whole week.

Gold futures for delivery in August traded for $1 321.8 per troy ounce at 11:12 GMT on the COMEX in New York today, up 0.09%. Daily high and low stood at $1 324.1 and $1 319.5 per troy ounce, respectively. The contract lost 0.77% on Thursday, erasing gains from earlier in the week, when a three-month high of $1 334.9 per troy ounce was reached.

Meanwhile, silver contracts for September stood at $21.175 per troy ounce, for a gain of 0.18%. Daily high and low were at $21.280 and $21.125 per troy ounce, respectively. The contract dropped 0.77% yesterday, also negating earlier gains, after a three-month high of $21.335 per troy ounce was reached on Wednesday.

“The dollar’s strength, helped by the positive U.S. jobs data, is weighing on gold,” Lv Jie, analyst at Cinda Futures Co., said for Bloomberg. “The longer-term outlook for a continued improvement in the U.S. economy will keep gold under pressure.”

US reports

Key US employment data was revealed yesterday. Nonfarm payrolls for June increased by 288 000, which is a four-year peak. ADP posted a 281 000 figure on Wednesday, and analysts had earlier suggested a growth of about 210 000. The unemployment rate dropped to 6.1%, which is the lowest rate since September 2008.

“The job numbers are telling us that the economy is healthy, and people don’t need a lot of safe haven going forward,” Alfonso Esparza, a senior currency analyst in Toronto at Oanda Corp., said in a telephone interview for Bloomberg. “Gold will probably now start weakening again.”

US stocks logged sizable gains during Thursday’s session, boosted by the employment report. S&P 500 added 0.55% as trading on Wall Street closed yesterday, for a record-high close of 1985.44. Dow 30 logged a 0.55% gain, also closing record-high at 17 068.26, while Nasdaq 100 added 0.61% for an all-time-high close of 3923.01. Dow Jones Euro Stoxx 50 closed for a 1.01% gain.

The US Dollar Index, which measures the greenback’s performance against six other major currencies, was up 0.38% yesterday. At 7:31 GMT today the gauge was up 0.03% at 80.28.

Copper

Copper futures for settlement in September dropped 0.27% to trade at $3.2705 per pound at 11:13 GMT today on the COMEX in New York. Prices shifted in a daily range between $3.2660 and a four-month peak of $3.2860 per pound. The contract added 0.44% yesterday, and so far this week it has gained more than 3.5%.

Payrolls “caught the whole market by surprise,” Tim Evans, the chief market strategist at Long Leaf Trading Group in Chicago, said in a telephone interview for Bloomberg. “When you have employment growing, naturally, the demand for industrial commodities like copper will be higher. You’ll tend to see buying in those markets.”