Commodities trading outlook: gold, silver and copper futures

Gold futures were pressured during midday trade in Europe today, while silver steadied, after the US posted a better-than-expected advanced GDP reading. Meanwhile, copper futures were higher, boosted by the preliminary GDP figure.

Gold futures for August settlement stood at $1 295.3 per troy ounce at 13:36 GMT in New York today, down 0.22%. Prices ranged from $1 291.0 to $1 303.0 per troy ounce. The contract dropped 0.38% on Tuesday, after closing unchanged on Monday.

Silver for September was up 0.20% to trade at $20.625 per troy ounce, after adding 0.08% yesterday.

Fed meeting

The Fed will conclude its 2-day meeting today, with decisions on the benchmark interest rate and the volume of monthly government assets purchases, which were introduced in late 2012 to pump fresh money into the then-slacking US economy.

Analysts suggest the rate will be unchanged at 0.25%. An interest rate hike is expected in early 2015, and investors await an indication of the time frame in the speech after the meeting concludes. Meanwhile, purchases will probably be trimmed by another $10 billion to $25 billion per month, which extrapolates to a close for the program in late 2014.

The program closing would support the dollar, as less money will be present in the economy, while a rate hike in the nearer future would also boost the dollar, pressuring gold.

US reports, dollar

ADP posted its reading on nonfarm payrolls for July today, suggesting the US economy has added 218 000 new jobs, less than the forecast figure of 230 000. The official report is due on Friday.

Meanwhile, the Bureau of Economic Analysis posted preliminary Q2 GDP figures today, to reveal a 4.0% growth on an annual basis, well above expected 3.0%. The news bumped the US Dollar Index to a one-year peak.

Platinum for October was down 0.18% at $1 481.85 per troy ounce, while palladium added 0.17% to trade at $879.80.

Ukraine, Gaza

The US and EU intensified sanctions against Moscow on Tuesday, with the US banning trade with three Russian banks, while the detailed list of EU’s measures is expected later today, and will include defense, energy, finance and high-tech trade curbs, as well as more asset freezes and travel bans to individuals.

“Because we’re closely coordinating our actions with Europe, the sanctions we’re announcing today will have an even bigger bite,” Obama told reporters yesterday at the White House. “Russia’s energy, financial and defense sectors are feeling the pain.”

Elsewhere, Gaza saw more bitter fighting on Tuesday and early on Wednesday, as the Israeli military continued shelling and destroying suspected Hamas-held buildings. The UN reported more casualties at one of their shelters, with a number of its staff killed by the Israeli fire as well.

The UN accused Israel of indiscriminate shelling, UN spokesman Chris Gunness saying “the world stands disgraced” by the attack, in which 15 died and dozens were hurt. Mr Gunness told the BBC that Israel had been told 17 times that the school in the Jabaliya refugee camp was housing civilian refugees.

The death toll has passed 1 200 Palestinians, most of them civilians, and 55 Israeli soldiers since tensions conflagrated earlier this month. The Palestinian health ministry also reported more than 6 700 people were injured.

Copper

Copper futures for delivery in September were 0.68% higher for the day, at $3.2410 per pound. Prices ranged from $ to $ per pound. The contract dropped 0.76% yesterday, after adding 0.09% on Monday.

Copper received strong support from The Bureau of Economic Analysis preliminary GDP growth figure today, sending the September contract in New York up almost 1%.

“Copper could get a boost on that type of news,” Phil Streible, senior market strategist at RJO Futures in Chicago, said for Bloomberg. “Improving economic conditions should boost demand for all base metals.”

Previously, Indonesia allowed Freeport-McMoRan Inc. to restart exports from its Grasberg mine, the third-largest copper mine worldwide, the company said late last Friday. Freeport is expected to export 756,000 tonnes of copper concentrate in the second half of this year, probably tipping the market into surplus and pressuring the red metal, Reuters reported.