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Gold / Silver / Copper futures - weekly outlook: September 8 - 12

Published 09/07/2014, 07:17 AM
Updated 09/07/2014, 07:17 AM
Gold ends the week down 1.56% on U.S. economic outlook

Gold ends the week down 1.56% on U.S. economic outlook

Investing.com - Gold futures bounced off a 12-week low to end Friday’s session mildly higher, as investors returned to the market following the release of weaker than expected U.S. nonfarm payrolls data for August.

On the Comex division of the New York Mercantile Exchange, gold for December delivery tacked on 0.06%, or 80 cents, to settle at $1,267.30 a troy ounce by close of trade on Friday.

Prices fell to a session low of $1,258.40 an ounce earlier Friday, a level not seen since June 10.

Futures were likely to find support at $1,250.10, the low from June 10 and resistance at $1,279.20, the high from September 4.

In a report, the Department of Labor said that the U.S. economy added 142,000 jobs in August, the lowest amount in eight months and less than the expected increase of 225,000.

The report also showed that the U.S. unemployment rate ticked down to 6.1% last month from 6.2%, but that was mostly due to more people dropping out of the labor force.

The weaker-than-expected jobs report was taken as a sign that the Federal Reserve will not begin raising interest rates anytime soon.

Gold costs money to store and struggles to compete yield-bearing assets when interest rates are on the rise.

Despite Friday's modest gains, Comex gold prices lost 1.56%, or $20.10, on the week, as the U.S. dollar rose to a 13-month peak against a basket of currencies.

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.

A recent batch of upbeat data underlined optimism over the strength of the U.S. economy and fuelled expectations that the Fed will begin to raise rates sooner than previously thought.

While the U.S. economy continues to gain steam, Fed Chair Janet Yellen has expressed concern over slackness persistent in the labor market.

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 September 2.

Net longs totaled 74,031 contracts, down 20.2% from net longs of 92,735 in the preceding week.

In the week ahead, investors will be looking ahead to Friday’s U.S. data on retail sales and consumer sentiment for further indications on the strength of the economic recovery and the possible future path of monetary policy.

Also on the Comex, silver for December delivery inched up 0.09%, or 1.8 cents, on Friday to settle at $19.15 a troy ounce by close of trade on Friday. Prices hit $19.02 an ounce earlier Friday, the lowest since June 10.

On the week, the December silver futures contract declined 1.74%, or 34.0 cents.

Data from the CFTC showed that net silver longs totaled 6,264 contracts as of last week, compared to net longs of 13,718 contracts in the preceding week.

Elsewhere in metals trading, copper for December delivery climbed 0.59%, or 1.8 cents, on Friday to end the week at $3.169 a pound by close of trade.

Comex copper prices tacked on 0.28%, or 0.9 cents, on the week, amid speculation weakening economic growth in China will prompt policymakers to introduce fresh stimulus measures.

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

According to the CFTC, net copper longs totaled 6,657 contracts as of last week, down sharply from net longs of 17,411 contracts in the preceding week.

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