Gold / Silver / Copper futures - weekly outlook: June 29 - July 3

Investing.com - Gold fell to a three-week low on Friday before reversing losses as investors continued to monitor developments surrounding talks between Greece and its international creditors, amid mounting fears over a potential debt default.

Market participants nervously eyed developments in Greece’s debt talks ahead of the looming deadline for Greece to repay €1.6 billion to the International Monetary Fund on June 30. If Greece misses the payment it risks going into default, which could trigger the country’s exit from the euro area.

Late on Friday, Greek Prime Minister Alexis Tsipras said the Greek government rejected the latest reform measures proposed by the country's creditors and instead called a surprise referendum for July 5.

European finance ministers refused to extend Greece’s bailout beyond June 30, despite Greek requests to extend the program until after the referendum, deepening doubt over Greece’s future in the euro zone.

On the Comex division of the New York Mercantile Exchange, gold futures for August delivery hit a daily low of $1,167.10 a troy ounce, a level not seen since June 5, before turning higher to close at $1,173.20, up $1.40, or 0.12%. Futures were likely to find support at $1,162.10, the low from June 5, and resistance at $1,187.70, the high from June 23.

For the week, prices of the precious metal slumped $26.50, or 2.39%, halting two straight weeks of gains, amid indications that the U.S. economy is regaining strength after a recent bout of weakness, supporting the case for higher interest rates later this year.

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 measures the greenback’s strength against a trade-weighted basket of six major currencies, tacked on 0.24% on Friday to close at 95.60. The index ended the week up 1.46%, the first weekly gain in four weeks.

Also on the Comex, silver futures for September delivery ended Friday's session at $15.76 a troy ounce, down 7.3 cents, or 0.46%. Prices hit $15.48 earlier in the session, the weakest level since March 18. On the week, silver prices dropped 36.5 cents, or 2.32%.

Elsewhere in metals trading, copper for September delivery rose 1.6 cents, or 0.61%, on Friday to settle at $2.635 a pound after hitting a daily peak of $2.648, the highest since June 15.

For the week, prices of the red metal jumped 7.2 cents, or 2.92%, halting five straight weeks of losses, as speculation mounted that Beijing will introduce fresh stimulus measures to support the economy sooner rather than later.

On Sunday, the People's Bank of China cut its benchmark interest rate by a quarter percentage point to 4.85% from 5.10%, in order to spur economic activity and boost growth.

It was the fourth rate cut since November, indicating that Beijing is becoming more aggressive in supporting the economy as its momentum slows and deflation risks rise.

The Asian nation is the world’s largest copper consumer, accounting for almost 40% of world consumption last year.

In the week ahead, investors will be focusing on developments in Greece. Market participants will also be looking ahead to the latest U.S. employment report, due for release one day ahead of schedule on Thursday, for signs of improvement in the labor market, which the Federal Reserve is a key factor in deciding when to start hiking interest rates.

Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.

Monday, June 29

In the euro zone, Germany and Spain are to release preliminary data on consumer inflation.

Later Monday, the U.S. is to publish a report on pending home sales.

Tuesday, June 30

The euro zone is to release preliminary data on consumer inflation and a report on the unemployment rate, while Germany is to release data on retail sales and the change in the number of people employed.

The U.S. is to release data on consumer confidence.

Wednesday, July 1

China is to publish official data on private sector growth, as well as the final reading of the HSBC manufacturing index.

The U.S. is to release a report on ADP nonfarm payrolls and later in the day the Institute of Supply Management is to release data on manufacturing activity.

Thursday, July 2

The U.S. is to release the closely watched nonfarm payrolls report, and data on wage growth one day early, ahead of the Independence Day holiday. U.S. data on initial jobless claims and factory orders is also due for release.

Friday, July 3

China is to publish data on the HSBC services index.

The euro zone is to round up the week with a report on retail sales.

U.S. markets are to remain closed for the July 4th holiday.