Gold / Silver / Copper futures - weekly outlook: October 6 - 10 Gold futures tumbled below the $1,200-level for the first time this year on Friday, as robust U.S. nonfarm payrolls data for September underlined optimism over the strength of the economy and fuelled expectations that the Federal Reserve will begin to raise rates sooner and faster than previously thought. Gold futures plunge after upbeat U.S. nonfarm payrolls data On the Comex division of the New York Mercantile Exchange, gold for December delivery hit a session low of $1,190.30 a troy ounce on Friday, a level not seen since December 31. Prices recovered to settle at $1,192.90, down $22.20, or 1.83%, for the day. For the week, Comex gold prices lost $26.20, or 2.14%, the fifth consecutive weekly drop. Futures were likely to find support at $1,182.00, the low from December 31 and resistance at $1,224.00, the high from October 2. In a report, the Department of Labor said that the U.S. economy added 248,000 jobs in September, well ahead of forecast for jobs growth of 215,000. The unemployment rate ticked down from 6.0% to 5.9%, the lowest level since July 2008. The upbeat data added to the view that the strengthening economic recovery may prompt the Federal Reserve to raise interest rates sooner than markets are expecting. Expectations of higher borrowing rates going forward is considered bearish for gold, as the precious metal struggles to compete with yield-bearing assets when rates are on the rise. The U.S. Dollar Index, which tracks the performance of the greenback against a basket of six major currencies, rallied 1.23% on Friday to close at 86.79, a level last seen in June 2010, capping its twelfth consecutive weekly gain. A stronger dollar usually weighs on gold, as it dampens the metals appeal as an alternative asset and makes dollar-priced commodities more expensive for holders of other currencies. In the coming week, investors will be looking ahead to Wednesday’s Federal Reserve meeting minutes for further indications on the future possible direction of U.S. monetary policy. Data from the Commodities Futures Trading Commission released Friday showed that hedge funds and money managers decreased their bullish bets in gold futures in the week ending September 30. Net longs totaled 37,743 contracts, down 14.7% from net longs of 44,265 in the preceding week. Also on the Comex, silver for December delivery plunged 22.1 cents, or 1.3%, on Friday to settle the week at $16.82 a troy ounce by close of trade. Prices hit a daily low of $16.64 earlier, the weakest level since March 2010. On the week, the December silver futures contract lost 75.0 cents, or 4.26%, the fifth straight weekly loss. Data from the CFTC showed that net silver shorts totaled 6,073 contracts as of last week, compared to net shorts of 4,893 contracts in the preceding week. Elsewhere in metals trading, copper for December delivery was unchanged on Friday to end the week at $2.998 a pound by close of trade. Prices hit a six-month low of $2.985 on Thursday. Comex copper prices lost 3.9 cents, or 1.28%, on the week, amid speculation weakening economic growth in China will reduce demand for the industrial metal. The Asian nation is the world’s largest copper consumer, accounting for almost 40% of world consumption last year. According to the CFTC, net copper shorts totaled 21,438 contracts as of last week, compared to net shorts of 12,304 contracts in the preceding week. bit.ly/Z6lRJq
Posted on: Sun, 05 Oct 2014 22:40:31 +0000
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