Gold / Silver / Copper futures - weekly outlook: January 26 - 30

Investing.com - Gold edged lower on Friday, as a broadly stronger U.S. dollar prompted investors to book profits from a recent rally which took prices to the highest level in more than five months.

On the Comex division of the New York Mercantile Exchange, gold futures for February delivery dipped $8.10, or 0.62%, to settle at $1,292.60 a troy ounce by close of trade on Friday.

Futures were likely to find support at $1,272.10, the low from January 20, and resistance at $1,316.50, the high from August 15.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, rose to more than 11-year highs of 95.77 on Friday, before trimming gains to end at 95.32, up 0.69% for the day and 2.33% higher for the week.

A stronger U.S. dollar usually weighs on gold, as it dampens the metal's appeal as an alternative asset and makes dollar-priced commodities more expensive for holders of other currencies.

The euro fell to fresh 11-year lows against the greenback after the European Central Bank unveiled a €1.2 trillion asset purchase program on Thursday.

The central bank will purchase €60 billion in assets per month, starting in March and continuing until late 2016, to combat slowing growth and inflation in the euro area.

Expectations of monetary stimulus tend to benefit gold, as the metal is seen as a safe store of value and inflation hedge.

The euro was also under pressure amid uncertainty over the outcome of Greek elections, due to be held on Sunday, with anti-bailout party Syriza leading in the polls.

A day earlier, gold hit $1,307.80, the most since August 15, before ending at $1,300.70, up $7.00, or 0.54%.

On the week, gold tacked on $15.70, or 1.21%, the third consecutive weekly gain. Gold is up almost 10% so far in 2015 as investors sought safety from volatility in global financial markets.

Also on the Comex, silver futures for March delivery shed 6.0 cents, or 0.33%, on Friday to settle the week at $18.30 a troy ounce by close of trade. On Wednesday, silver rallied to $18.50, the most since September 19.

The March silver futures contract picked up 55.0 cents, or 3%, on the week, the third straight weekly advance. Silver has gained nearly 16.5% in 2015.

In the week ahead, investors will be awaiting the outcome of Wednesday’s Federal Reserve policy meeting for further clarification on when interest rates might start to rise.

Friday’s preliminary data on U.S. fourth quarter growth will also be in focus.

Elsewhere in metals trading, copper for March delivery tumbled 7.7 cents, or 2.99%, on Friday to settle the week at $2.501 a pound by close of trade.

Copper's losses came after data showed that China's HSBC Flash Manufacturing Purchasing Manager's Index held below the 50.0-level for the second straight month in January, underlining concerns over the health of the world's second largest economy.

On the week, Comex copper lost 11.6 cents, or 4.43%, the second straight weekly decline.

The red metal is down approximately 11.6% so far in January as concerns over the global economic outlook and the impact on future demand prospects dampened the appeal of the commodity.

Copper hit $2.423 a pound on January 14, a level not seen since June 2009.