Gold / Silver / Copper futures - weekly outlook: November 17 - 21

Investing.com - Gold and silver surged to two-week highs on Friday, as investors closed out bets on lower prices, a move known as short-covering.

On the Comex division of the New York Mercantile Exchange, gold futures for December delivery rallied $24.10, or 2.07%, to settle at $1,185.60 a troy ounce by close of trade on Friday.

Comex gold prices touched a session high of $1,192.90 an ounce earlier in the day, the most since October 31.

On the week, gold prices rose $15.80, or 1.33%, the first weekly gain in four weeks.

Futures were likely to find support at $1,146.00, Friday's daily low, and resistance at $1,202.40, the high from October 31.

Also on the Comex, silver futures for December delivery soared 69.3 cents, or 4.44%, on Friday to settle the week at $16.31 a troy ounce by close of trade.

Prices hit a daily peak of $16.38 an ounce earlier Friday, the highest level since October 31.

The December silver futures contract tacked on 60.0 cents, or 3.67%, on the week, halting a three-week losing streak.

Despite Friday's upbeat performance gold prices are likely to remain vulnerable in the near-term amid indications a strengthening U.S. economic recovery will force the Federal Reserve to start raising interest rates sooner and faster than previously thought.

The Commerce Department said Friday that U.S. retail sales rose 0.3% in October, ahead of forecasts for a 0.2% increase.

A separate report from the University of Michigan showed that its consumer sentiment index rose to a seven year high of 89.4, better than forecasts of 87.5 and up from October’s reading of 86.9.

Comex gold prices have been under heavy selling pressure in recent weeks amid speculation the Federal Reserve is moving closer to raising interest rates for the first time in eight years after ending its monthly bond-buying program, also known as quantitative easing, last month.

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.

In the week ahead, investors will be focusing on Wednesday’s minutes of the Federal Reserve’s October meeting and Thursday’s report on the U.S. consumer price index.

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 November 11.

Net longs totaled 38,763 contracts, down 14.2% from net longs of 45,072 in the preceding week.

The report also showed that net silver shorts totaled 1,983 contracts as of last week, compared to net shorts of 6,163 contracts in the preceding week.

Elsewhere in metals trading, copper for December delivery rallied 5.2 cents, or 1.74%, on Friday to settle at $3.046 a pound by a close of trade, after upbeat U.S. retail sales and consumer sentiment data indicated that the economic recovery is gaining momentum.

On the week, Comex copper prices inched up 0.8 cents, or 0.26%, despite ongoing concerns over the health of the global economy.

Copper is sensitive to the economic growth outlook because of its widespread uses across industries.

According to the CFTC, net copper shorts totaled 1,664 contracts as of last week, compared to net shorts of 5,961 contracts in the preceding week.