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Gold / Silver / Copper futures - weekly outlook: May 12 - 16

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Investing.com - Gold futures ended Friday's session modestly lower, as a broadly stronger U.S. dollar dampened the appeal of the precious metal, while traders continued to monitor developments in Ukraine.

On the Comex division of the New York Mercantile Exchange, gold for June delivery ended Friday's session down 0.01%, 10 cents a troy ounce, to settle at $1,287.60.

Gold prices were likely to find support at $1,272.00 an ounce, the low from May 2 and resistance at $1,315.00, the high from May 7.

The U.S. dollar rallied to a one-month peak against the euro on Friday, extending steep gains from the previous session after the European Central Bank indicated that it could ease monetary policy as soon as next month.

The U.S. Dollar Index, which tracks the performance of the greenback against a basket of six other major currencies, advanced 0.57% on Friday to end the week at 79.92, the most since April 30.

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.

Meanwhile, market players weighed uncertainty surrounding developments in Ukraine. Russian President Vladimir Putin called on pro-Russia separatists in the eastern reaches of the country to postpone their referendum on independence earlier in the week.

However, the separatists said they plan to go ahead on Sunday with a vote that some fear could lead to a civil war. The West is accusing Russia of leading a separatist revolt in eastern Ukraine after it annexed Crimea last month.

Gold, seen as a safe haven investment, usually benefits from geopolitical turmoil.

On the week, Comex gold retreated 1.17%, or $15.30 an ounce. Gold fell to $1,284.80 an ounce on Thursday, the lowest since May 2 following upbeat comments on the economy from Federal Reserve Chair Janet Yellen.

Gold tumbled after Fed Chair Yellen said the central bank expects U.S. economic growth to accelerate this year despite the slowdown in the first quarter. The comments came during testimony to the Joint Economic Committee of Congress.

In the week ahead, investors will be looking to U.S. data on retail sales, consumer prices and consumer sentiment for further indications on the strength of the economy and the need for stimulus.

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 May 6.

Net longs totaled 102,985 contracts, up 12.65% from net longs of 89,954 in the preceding week.

Also on the Comex, silver for July delivery eased down 0.09%, or 1.7 cents, on Friday to settle the week at $19.12 a troy ounce, the weakest level since May 2. Silver dropped 1.05%, or 20.4 cents, on Thursday to end at $19.13 an ounce.

On the week, the July silver futures contract lost 2.14%, or 42.0 cents an ounce.

Data from the CFTC showed that net silver longs fell to 988 contracts as of last week, down 46.9% from net longs of 1,862 in the preceding week.

Elsewhere in metals trading, copper for July delivery added 0.67%, or 2.0 cents, on Friday to settle the week at $3.083 a pound by close of trade.

On the week, Comex copper prices inched up 0.32%, or 1.0 cent a pound, amid easing concerns over a slowdown in demand from top consumer China.

Data released Friday showed that consumer price inflation in China rose 1.8% in April from a year earlier, less than market expectations for a 2.0% gain, while producer price inflation declined 2%, more than market calls for a 1.9% contraction.

On Thursday, official trade data showed that China's surplus widened to $18.45 billion in April from a surplus of $7.7 billion in March, compared to estimates for a surplus of $13.9 billion.

Exports climbed 0.9% from a year earlier, beating expectations for a 1.7% decline and following a 6.6% drop in March. Imports rose 0.8%, compared to forecasts for a 2.3% decline and after plunging 11.3% in the previous month.

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 698 contracts as of last week, compared to net longs of 5,067 in the preceding week.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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