Commodities trading outlook: gold, silver and copper futures

Gold and silver futures were lower during midday trade in Europe today, though headed for sizable weekly gains on US Fed minutes and a slump for stocks. Meanwhile, copper futures were lower and headed for weekly losses after reported shrinking imports in top-consumer China.

Gold futures for delivery in August traded for $1 336.8 per troy ounce at 13:02 GMT on the COMEX in New York today, down 0.18%. Daily high and low stood at $1 340.4 and $1 335.5 per troy ounce, respectively. The contract added 1.13% yesterday, reaching a three-month high of $1 346.8 per troy ounce, and so far this week has gained about 1.4%.

Meanwhile, silver contracts for September stood at $21.475 per troy ounce, for a drop of 0.15%. Daily high and low were at $21.565 peak, and $21.450 per troy ounce, respectively. The silver contract added 2.09% on Thursday, reaching a four-month peak at $21.630 per troy ounce, and so far this week silver has gained about 1.8%.

“Gold prices have opened pretty much flat,” Edward Meir, analyst at INTL FCStone Inc. in New York, said in a note, cited by Bloomberg. Should bullion rise today, “this is going to attract even further technical interest, although we ourselves are not that inclined to jump in given that we do not think the Portuguese banking story will have much staying power and is significant enough to deliver a destabilizing jolt.”

Stocks, dollar

US stocks returned downwards during Thursday’s session, with all major indices closing for losses. S&P 500 lost 0.41% as Wall Street trading closed, Dow 30 declined by 0.42%, while Nasdaq 100 was down 0.33%.

“Money seems to be shifting out of equities and into gold,” said one precious metals trader in Hong Kong, cited by Bloomberg.

Meanwhile, assets at the SPDR Gold Trust – the largest gold-backed exchange-traded fund, was almost unchanged on Thursday at 800.05 tons, after adding some 2 tons earlier this week. The fund has gained more than 16 tons over the last three 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, added 0.16% on Thursday. The gauge has lost about 0.2% so far this week, and by 12:58 GMT today it was up 0.08% at 80.23.

Copper

Copper futures for settlement in September dropped 0.37% to trade at $3.2550 per pound at 13:03 GMT today on the COMEX in New York. Prices shifted in a daily range between $3.2525 and $3.2745 per pound. The contract added 0.58% yesterday, and has dropped about 0.4% this week, though it did reach a four-month peak of $3.2940 per pound.

Chinese imports of unwrought copper and copper products fell by 7.9% on a monthly basis to 350 000 tons in June, a government reported revealed yesterday, as an ongoing copper-related lending fraud investigation weighed on the metal’s appeal as a financing deals collateral. Lenders are tightening commodity-backed financing criteria following the investigation in China, where more than 40% of all copper goes, Bloomberg reported.

“The imports drop is evidence of waning demand for the metal as the investigation into metals warehousing in Qingdao has made banks reluctant to offer financing,” Tetsu Emori, fund manager at Astmax Asset Management in Tokyo, said for Bloomberg.

Previously, Goldman Sachs predicted that copper prices will “grind lower” over the next 6 to 12 months, as Chinese housing-related demand, which accounts for more than 50% of Chinese copper consumption wanes. Supply will outpace demand by some 385 000 tons this year and 454 000 tons next year, Goldman said yesterday, cited by Bloomberg.