Gold / Silver / Copper futures - weekly outlook: February 3 - 7

Investing.com - Gold futures ended Friday’s session close to a one-week low, as prospects of further stimulus tapering by the Federal Reserve weighed on the precious metal.

On the Comex division of the New York Mercantile Exchange, gold futures for April delivery settled at USD1,244.20 a troy ounce on Friday, down 0.22%. Comex gold prices fell to USD1,237.50 a troy ounce on Thursday, the lowest since January 23, before trimming losses to settle at USD1,242.50, 1.56% lower.

Gold futures were likely to find support at USD1,230.80 a troy ounce, the low from January 23 and resistance at USD1,270.70, the high from January 29.

On the week, the April Comex gold contract declined 1.58%, the first weekly loss in six weeks.

Meanwhile, silver for March delivery ended Friday’s session down 0.03% to close the week at USD19.12 a troy ounce. On Thursday, silver prices slumped to USD18.97 an ounce, the weakest level since December 31.

The March silver futures contract lost 3.23% on the week, the second consecutive weekly decline.

On Wednesday, the Fed said it would scale back its monthly asset purchase program by another USD10 billion to USD65 billion a month, citing improvements in the labor market.

The central bank said it will keep a close eye on economic indicators before deciding to wind down its stimulus program even further.

Data released on Thursday showed that the U.S. economy grew 3.2% in the fourth quarter, in line with expectations.

On Friday, U.S. data showed that consumer spending rose 0.4% in December, above expectations for an increase of 0.2%.

In the week ahead, investors will be keenly anticipating Friday’s U.S. nonfarm payrolls report for January after December’s report showed that the economy added far fewer jobs than expected.

Some market participants believe the Fed will taper its bond purchases by USD10 billion in each of its next six meetings before ending the program in December 2014, amid indications of an improving U.S. economy.

Data from the Commodities Futures Trading Commission released Friday showed that hedge funds and money managers raised their bullish bets in gold futures in the week ending January 28.

Gross long gold positions rose by 6,273 contracts to 120,096, while gross short positions fell by 11,047 lots to 59,424. Net longs totaled 60,672 contracts, compared to 43,353 in the preceding week.

Elsewhere on the Comex, copper for March delivery slumped to a daily low of USD3.190 a pound on Friday, the weakest since December 4, before trimming losses to end at USD3.197 a pound, down 0.91%.

Comex copper prices declined 2.26% on the week, the third consecutive weekly drop, as ongoing concerns over the economic outlook in emerging markets and the impact on future demand prospects dampened the appeal of the commodity.