Commodities trading outlook: gold, silver and copper futures

Gold and silver futures were lower during midday trade in Europe today, after adding on Ukraine and Gaza concerns on Thursday. Meanwhile, copper futures were also lower and headed for weekly losses as stocks dropped.

Gold futures for delivery in August traded for $1 311.0 per troy ounce at 11:28 GMT on the COMEX in New York today, down 0.28%. Daily high and low stood at $1 325.5 and $1 308.3 per troy ounce, respectively. The contract added 1.32% on Thursday, and is down some 1.5% so far this week.

Meanwhile, silver contracts for September stood at $20.995 per troy ounce, for a loss of 0.66%. Daily high and low were at $21.315 and $20.930 per troy ounce, respectively. The silver contract gained 1.73% yesterday, and is also down about 1.5% for the week.

Ukraine

A Malaysian airliner, Boeing 777, carrying 298 people, crashed over rebel-controlled territory in eastern Ukraine last night, immediately spurring speculation that it was shot down. The plane was flying at cruise altitude of some 10 kilometers, and no distress signal was emitted.

“In order to bring down an airplane from an altitude of 10,000m, you need to have very serious weapons…. missiles,” Sergei Kovalyov, head of the Russian Air Traffic Controllers’ Union, said for the BBC. “It’s either a mistake or a terrorist act.”

Ukrainian President Petro Poroshenko said it was an “act of terrorism”, while Foreign Minister Pavlo Klimkin told the BBC authorities had intercepted phone conversations that proved the plane was shot down by pro-Russian separatists.

Alexander Borodai, a separatist leader, accused the Ukrainian government of shooting the plane down, and Russian President Vladimir Putin dismissed any liability. “The country in whose airspace this happened bears responsibility for it,” he said.

Earlier, the Ukrainian military had said two of its own warplanes were shot down by the militants, one of which is said to have also been at relatively high altitude of 6-7 km. Authorities say the insurgents are now equipped with modern and powerful weaponry supplied by Russia.

The Kremlin has denied any involvement with the conflict and the separatists. During the Crimean crisis, Russian President also denied Moscow’s involvement, only to later admit that it was Russian soldiers who took over the peninsula.

Israel

After 10 days of airstrikes and naval bombardment, the Israeli ground forces have begun moving into the Gaza strip, fighting Hamas militants.

“Following 10 days of Hamas attacks by land, air and sea, and after repeated rejections of offers to de-escalate the situation, the IDF [Israel Defense Forces] has initiated a ground operation within the Gaza Strip,” the military said in a statement.

Since fighting escalated on July 8, nearly 2 000 attacks by the Israeli military have been carried out in the Gaza strip, while Hamas militants have fired more than 1 380 missiles aimed at Israel.

Meanwhile, the UN says at least 1 370 homes have been destroyed in Gaza and more than 18,000 people displaced in recent hostilities, while most of those killed in Gaza have been civilians.

Stocks, dollar

US stocks slumped on Thursday, with S&P 500 losing 1.18% as Wall Street trading closed, Dow 30 dropped 0.94%, while Nasdaq 100 was down 1.38%.

Meanwhile, assets at the SPDR Gold Trust – the largest gold-backed exchange-traded fund, lost about 3 tons on Thursday, erasing most of earlier gains this week, for a standing of 803.34 tons. The fund gained some 20 tons over the past month, after assets were pressured to multi-year lows earlier, by a recovering US economy.

The US Dollar Index, which measures the greenback’s performance against six other major currencies, dropped 0.06% yesterday, after adding about 0.5% earlier this week. By 8:08 GMT today the gauge was down 0.01% at 80.57.

Copper

Copper futures for settlement in September were down 0.70% to trade at $3.1980 per pound at 11:25 GMT today on the COMEX in New York. Prices shifted in a daily range between $3.1890 and $3.2190 per pound. The contract added 0.19% on Thursday, and is down some 1.5% this week.

“For the moment, stock moves and fundamentals will take second place to the worsening geopolitical situation,” Mark Newson-Smith, head of metal sales at Xconnect Trading Ltd., said by for Bloomberg today. “Equities will be under pressure and sentiment poor so liquidation is likely in the short term.”