Commodities trading outlook: gold, silver and copper futures

Gold and silver futures climbed during midday trade in Europe today, after the US posted disappointing payrolls data. An escalation of tensions in Gaza also stoked some safe haven demand. Meanwhile, copper futures were higher, supported by bullish readings on factories in China.

Gold futures for delivery in December, the most traded gold contract in New York, traded at $1 296.8 per troy ounce at 13:17 GMT today, up 1.09%. Daily high and low were at $1 298.4 and $1 281.0 per troy ounce, respectively. The contract dropped 1.09% yesterday for a weekly loss of about 1.6%.

Silver futures for September had added 0.19% to trade at $20.450 per troy ounce. The contract dropped 0.90% yesterday, for a weekly loss of about 1.1%

Platinum for October was up 0.16% to trade at $1 467.50 per troy ounce, while September palladium was 0.06% lower at $873.20.

US jobs

The Bureau of Labor Statistics reported that the US economy had added 209 000 nonfarm payrolls in the month of July, well below the expected 233 000. The unemployment rate also logged on the downside, standing for 6.2%, more than the forecast 6.1%.

The US Dollar Index, a measurement of the US currency, dropped about 0.2% on the news, to stand at 81.38 by 13:08 GMT.

ISM will post its key reading on US manufacturing PMI for July later today, and analysts expect a rise to 56.0.

Previously, initial jobless claims for the week through July 26 were logged at 302 000 yesterday, highlighting the Fed’s expressed concern with the instability of the US labor market. Also, Chicago PMI was significantly below expectations at 52.6, after analysts had suggested a reading of 63.0.

The US Bureau of Economic Analysis posted a 4.0% preliminary Q2 GDP growth, well above the expected 3.0%. Also, the reading for Q1 was revised from -2.9% to -2.1%, adding to positive sentiment for the world’s largest economy.

Gaza truce ends

The 72-hour truce, which was declared by Israel and supported by Hamas earlier today, was shattered as Israeli shells killed more than 40 Palestinians, after a reported abduction of an Israeli soldier by the militants.

Delegations of both warring parties had arrived in Cairo, Egypt, earlier today, to attend peace talks, but Egyptian authorities have said the talks were now postponed in light of the renewed violence.

Overall, more than 1 460 Palestinians, most of them civilians, are reported dead, according to the Palestinian Health Ministry, while 63 Israeli soldiers had also died.

Copper

Copper futures for September settlement stood at $3.2375 per pound, up 0.20%. The contract dropped 0.32% on Thursday, for a weekly loss of about 0.3%.

The red metal was offered some support early today, after China, the worlds top consumer of industrial metals reported an improving factory sector. The official Chinese manufacturing PMI gauge was logged at 51.7 for July, matching HSBCs reading, signaling an expansion of activities withing the sector.

“Consumption in China is starting to pick up and inventories are starting to draw down … I like the look of copper because I think this demand will push us into a deficit sooner than we think,” Jonathan Barratt, chief investment officer at Ayers Alliance Securities in Sydney, said for Reuters.

Previously, Copper received strong support from The Bureau of Economic Analysis’ preliminary GDP growth figure on Wednesday, 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.”