Gold / Silver / Copper futures - weekly outlook: October 20 - 24

Investing.com - Gold futures ended Friday's session modestly lower as market sentiment stabilized, although prices still posted a weekly gain as concerns over the global economic outlook boosted safe-haven demand.

On the Comex division of the New York Mercantile Exchange, gold for December delivery lost $2.20, or 0.18%, to settle at $1,239.00 a troy ounce by close of trade.

Despite Friday's downbeat performance, Comex gold prices still rose $17.30, or 1.39%, on the week, the second consecutive weekly gain.

Futures were likely to find support at $1,217.60, the low from October 10, and resistance at $1,250.30, the high from October 15.

U.S. and European stock markets rallied on Friday, following steep losses and massive intraday swings over the past five days, sparked by concerns about global economic weakness and fears over the spread of Ebola.

The S&P 500, Dow Jones and the tech-heavy Nasdaq all gained more than 1% on Friday, while Germany's DAX surged more than 3%.

Gold and stocks tend to move in opposite directions.

Meanwhile, investors continued to speculate over the timing of a rate hike in the U.S. after a report showed that the University of Michigan’s consumer sentiment index unexpectedly rose to 86.4 in October, the most since July 2007.

Another report showed that housing starts rose more than expected last month, bolstering the outlook for the sector.

Gold prices rallied to a five-week high on Wednesday amid speculation weaker than expected global economic growth and its effect on the U.S. economy may lead the Federal Reserve to push back interest-rate increases.

A delay in raising interest rates would be seen as bullish for gold, as it decreases the relative cost of holding on to the metal, which doesn't offer investors any similar guaranteed payout.

The US Dollar Index, which tracks the performance of the greenback against a basket of six major currencies, ended the week down 0.7% at 85.31.

Dollar weakness usually benefits gold, as it boosts the metal's appeal as an alternative asset and makes dollar-priced commodities cheaper for holders of other currencies.

In the week ahead, investors will be awaiting U.S. data on consumer price inflation and new home sales for fresh signals on the strength of the economic recovery.

Data from the Commodities Futures Trading Commission released Friday showed that hedge funds and money managers increased their bullish bets in gold futures in the week ending October 14.

Net longs totaled 51,994 contracts, up 28.3% from net longs of 37,275 in the preceding week.

Also on the Comex, silver for December delivery shed 10.6 cents, or 0.61%, on Friday to settle the week at $17.33 a troy ounce by close of trade.

On the week, the December silver futures contract advanced 3.0 cents, or 0.17%, the second straight weekly gain.

Data from the CFTC showed that net silver shorts totaled 9,089 contracts as of last week, compared to net shorts of 7,071 contracts in the preceding week.

Elsewhere in metals trading, copper for December delivery fell to a session low of $2.951 a pound, a level not seen since March 23, before turning higher to settle at $3.003, up 2.2 cents, or 0.74%.

Futures turned higher after China's central bank signaled plans to extend as much as 200 billion yuan in short-term loans to the nation's banks in order to spur lending activity and boost growth.

Despite Friday's gains, Comex copper prices still lost 3.2 cents, or 1.05%, on the week as concerns over the global economic outlook and the impact on future demand prospects dampened the appeal of the commodity.

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

According to the CFTC, net copper shorts totaled 11,375 contracts as of last week, compared to net shorts of 21,249 contracts in the preceding week.

Copper traders are looking ahead to a raft of Chinese economic data later this week, including reports on third quarter gross domestic product, as well as data on industrial production and retail sales.

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