Gold / Silver / Copper futures - weekly outlook: April 20 - 24
New York (Apr 19) Gold prices ended above the $1,200-level on Friday, as traders continued to mull the timing of a Federal Reserve rate hike to gauge the appeal of the precious metal.
On the Comex division of the New York Mercantile Exchange, gold futures for June delivery tacked on $5.10, or 0.43%, to settle at $1,203.10 a troy ounce by close of trade.
Futures were likely to find support at $1,183.50, the low from April 14, and resistance at $1,224.50, the high from April 6.
Despite Friday's gain, gold prices dipped $1.50, or 0.12%, on the week, snapping four straight weeks of gains.
The Labor Department reported Friday that U.S. inflation edged up 0.2% last month, matching a similar gain in February. On a year-over-year basis, consumer prices dipped 0.1% in March after remaining flat in February.
Core consumer prices, which exclude food and energy costs increased 0.2% in March for an annual increase of 1.8%, the largest since October.
The report came after data earlier in the week showed that U.S. retail sales for March came in below expectations. Another report, showing a larger-than-forecast drop in industrial output pointed to a slowdown the first quarter.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, fell 0.27% on Friday to hit 97.62 by close of trade. The index ended the week down 1.9%.
Gold prices have been well-supported in recent weeks amid speculation the Fed could delay hiking interest rates until late 2015, instead of tightening midyear, after a recent run of soft economic data dampened optimism on the recovery.
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.
Elsewhere on the Comex, silver futures for May delivery ended Friday's session at $16.22 a troy ounce, down 5.5 cents, or 0.34%. For the week, silver lost 19.1 cents, or 0.93%, the third straight weekly decline.
In the week ahead, investors will be looking ahead to reports on the U.S. housing sector and data on durable goods orders for further indications on the strength of the recovery.
Meanwhile, uncertainty over Greece’s bailout negotiations with its creditors remained in focus ahead of Monday's deadline.
Also in metals trading, copper for May delivery picked up 1.8 cents, or 0.63%, on Friday to settle at $2.792 a pound after rallying to a daily high of $2.809, the strongest level since April 6.
Copper prices jumped 3.8 cents, or 1.46%, on the week, amid speculation policymakers in China will have to introduce further stimulus measures to jumpstart the economy amid lackluster growth.
China's central bank announced over the weekend that it lowered the amount of deposits it requires banks to hold as reserves to 18.5% from 19.5% effective April 20 in a surprise decision.
The move came after official data showed that China’s economy grew 7.0% in the first quarter, the slowest pace of growth since the global financial crisis in 2008.
Data on industrial production, retail sales and fixed asset investment also fell short of forecasts, indicating that China needs to act to prevent a further slowdown in the economy.
The Asian nation is the world’s largest copper consumer, accounting for almost 40% of world consumption last year.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets. The guide skips Monday and Tuesday as there is no relevant data on these days.
Wednesday, April 22
The U.S. is to release data on existing home sales.
Thursday, April 23
China is to release private sector data on manufacturing activity.
Later Thursday, the U.S. is to report in initial jobless claims and new home sales.
Friday, April 24
The U.S. is to round up the week with a report on durable goods orders.
Source: Investing.com
