Gold / Silver / Copper futures - Weekly outlook: June 3 - 7

Investing.com - Gold futures came under heavy selling pressure on Friday, after upbeat economic data added to speculation over an earlier-than-expected end to the Federal Reserve’s asset purchase program.

Moves in the gold price this year have largely tracked shifting expectations as to whether the U.S. central bank would end its bond-buying program sooner-than-expected.

On the Comex division of the New York Mercantile Exchange, gold futures for August delivery tumbled 1.75% on Friday to settle the week at USD1,387.35 a troy ounce, little changed on the week.

Gold futures were likely to find support at USD1,353.55 a troy ounce, the low from May 22 and resistance at USD1,421.25, Friday’s high and a two-week high.

Gold prices turned lower after the University of Michigan said its consumer sentiment index rose to 84.5 in May, its highest level since July 2007, from76.4 in April and up from a preliminary estimate of 83.7.

A separate report showed that manufacturing activity in the Chicago-area improved at the fastest pace in over a year last month.

Market research group Kingsbury International said its Chicago purchasing managers’ index jumped to a seasonally adjusted 58.7 in May from a reading of 49.0 in April. Analysts expected a reading of 50.3

The robust data bolstered expectations that the Federal Reserve could begin to scale back its USD85 billion a month asset purchase program this year.

Any improvement in the U.S. economy could scale back expectations for further easing from the Federal Reserve, weighing on dollar-denominated commodities.

The upbeat data came after the Commerce Department said U.S. consumer spending fell 0.2% in April, confounding expectations for a 0.2% increase, as personal income stagnated.

Elsewhere on the Comex, silver for July delivery fell 2.2% on Friday to settle the week at USD22.19 a troy ounce. On the week, silver future prices lost 0.6%.

Meanwhile, copper for July delivery retreated 1.3% on Friday to close the week at USD3.273 a pound.

Comex copper prices lost 0.65% on the week amid concerns over the global economic outlook, especially in top consumer China.

Data over the weekend showed that manufacturing activity in China improved modestly in May.

The state-affiliated China Federation of Logistics and Purchasing said on Saturday that its manufacturing activity index inched up to 50.8 from April’s reading of 50.6.

In the week ahead, investors will be awaiting the release of Friday’s closely watched report on U.S. nonfarm payrolls for further hints regarding the direction of U.S. monetary policy.

Editor's Note: Learn how to profit from the Non-Farm Payrolls Report, one of June's biggest market-moving announcements. Watch expert Steve Ruffley trade the NFP in real time on June 7, 2013 via our Special Live Event. Ruffley has an astounding record of 25 consecutive, profitable sessions during this event, so don't miss this chance to learn how to trade during volatile periods. To find out more, click here.