Commodities trading outlook: gold, silver and copper futures

Gold and silver futures were higher during midday trade in Europe today, after SPDR continued adding to assets on Monday, while stocks fell. Meanwhile, copper futures were also higher.

Gold futures for delivery in August traded for $1 323.1 per troy ounce at 13:06 GMT on the COMEX in New York today, up 0.46%. Daily high and low stood at $1 325.0 and $1 317.6 per troy ounce, respectively. The contract lost 0.27% yesterday, after it added about 0.2% last week, reaching a three-month high of $1 334.9 per troy ounce.

Meanwhile, silver contracts for September stood at $21.155 per troy ounce, for a gain of 0.67%. Daily high and low were at $21.245 and $21.020 per troy ounce, respectively. The silver contract dropped 0.28% on Monday, after it added about 0.2% last week, also reaching a three-month high of $21.335 per troy ounce.

“Market expectations for an early rate hike is pressuring the gold price,” Sarah Xie, a Hong Kong-based analyst at Wing Fung Financial Group Ltd., wrote in a note, cited by Bloomberg. “Gold is expected to remain flat until investors get more guidance from the Fed regarding the timing of rate increases.”

Minutes from the Federal Open Market Committee (FOMC) June meeting will be released this Wednesday. The log is closely monitored by traders, since it reveals the plans and direction of the US most-senior monetary policy body.

The meeting, which took place some three weeks ago, resulted in decisions to keep the benchmark lending rate unchanged at 0.25%, while reducing assets purchases through its monetary stimulus program by another $10 billion to $35 billion a month, expressing limited confidence in the US economic recovery.

Stocks

US stocks backed off from the record highs logged last week, with all major indices closing for sizable losses. S&P 500 dropped 0.39% as Wall Street trading closed on Monday, Dow 30 declined by 0.26%, while Nasdaq 100 was down 0.31%.

Meanwhile, assets at the SPDR Gold Trust – the largest gold-backed exchange-traded fund, added about 2 tons on Monday to stand at 798.19 tons, after gaining more than 14 tons over the last two weeks. Assets were recently pressured to multi-year lows by a recovering US economy.

The US Dollar Index, which measures the greenback’s performance against six other major currencies, dropped 0.10% on Monday, and by 8:19 GMT today was up 0.06% at 80.31.

Copper

Copper futures for settlement in September added 0.67% to trade at $3.2830 per pound at 13:08 GMT today on the COMEX in New York. Prices shifted in a daily range between $3.2485 and a four-month peak of $3.2940 per pound. The contract dropped 0.56% on Monday, after copper added about 4% last week, boosted by positive US and Chinese economic data.

Copper inventories monitored by the London Metal Exchange increased 1.8 percent to 159,350 metric tons, Bloomberg reported today.

“With the inventories increasing, we’re seeing a little bit of a negative tone in the market, especially since the rally we had last week was a little bit overdone,” Tom Power, a senior market strategist at RJO Futures in Chicago, said for Bloomberg. “I’m not too concerned of any major pullback. The price drop may be “a buying opportunity.”