Gold futures were steady during midday trade in Europe today, while silver dropped. Fed Chair Janet Yellen spoke before Congress yesterday, and her remarks lifted the dollar, pressuring havens. Meanwhile, copper futures were lower, despite encouraging China data.
Gold futures for delivery in August traded for $1 298.3 per troy ounce at 11:56 GMT on the COMEX in New York today, up 0.09%. Daily high and low stood at $1 300.0 and $1 293.5 per troy ounce, respectively. The contract dropped 0.73% yesterday, after a further 2.30% loss on Monday.
Meanwhile, silver contracts for September stood at $20.735 per troy ounce, for a loss of 0.74%. Daily high and low were at $20.840 peak, and $20.685 per troy ounce, respectively. The silver contract lost 0.12% on Tuesday and a further 2.55% on Monday.
“I don’t see any new positions created at this level or any fresh buying in the physical markets,” Peter Fung, head of dealing at Wing Fung Precious Metals in Hong Kong, said for Reuters. “Prices will see some range-trading now and could consolidate at $1,280-90.”
Janet Yellen, Chair of the Federal Reserve, told lawmakers yesterday that the rate hike might be coming sooner than expected, lifting sentiment for the dollar and pressuring havens. She did, however, emphasize on the job-market weakness and on the necessity of further stimulus by the Fed.
“Despite Yellen defending the Fed’s stance to maintain loose monetary policies, the bullion markets seemed to interpret her comments for the possibility of an earlier than an anticipated rate hike as gold-bearish,” HSBC analysts said in a note. “With the break below $1,300/oz and technical weakness, further losses for gold are likely.”
The Fed’s last 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.
Copper futures for settlement in September dropped 0.20% to trade at $3.2430 per pound at 11:56 GMT today on the COMEX in New York. Prices shifted in a daily range between $3.2425 and $3.2560 per pound. The contract added 0.02% yesterday, after losing 0.61% on Monday.
Several key readings on the Chinese economy, the world’s top copper consumer, accounting for about 40% of total demand, were reported earlier today. GDP growth for Q2 of 2014 was logged at 2.0% on a quarterly basis and 7.5% year-on-year.
Industrial production for June was at a 9.2% annual growth, also above expectations, while fixed asset investments, also for June, added 17.3% since a year ago.
All figures stand above expectations and add on their respective previous reading.
“It’s moderately positive data,” Ric Spooner, chief strategist at CMC Markets in Sydney, said for Bloomberg today. To see Chinese “industrial production figures creeping up again is a good sign and reflects the improved export market and also strength in the domestic sector.”
The US, the worlds second-top copper consumer, will also post industrial production today, with analysts suggesting a 0.4% monthly gain for June.