Copper and gold futures saw scant action today Tuesday in the US, with ranges well-established ahead of a slew of data releases.
Gold futures for August delivery on the Comex division of the New York Mercantile Exchange ticked up 80 cents or 0.1 percent to settle at $1,217.50 per ounce. Trade ranged from $1,199.0 to $1,220.40.
Comex copper for July settlement declined 1.85 cents to close at $2.0955 per pound – the lowest since May 24. Trade ranged from $2.0750 to $2.1160.
The extended weekend led to a dearth of market action today as the calendar turns to summer – a typically slow period for investors.
Macroeconomic data continues to show a mixed backdrop, with improving data from the US and Japan prompting upgraded growth forecasts.
Nevertheless, Chinese demand is still the overarching theme shaping the market – investors will be focusing on May manufacturing PMIs due on Wednesday to gauge the strength of Chinese economic recovery.
“The high summer period is getting nearer, so we would expect to see less from the industry – with the funds being the drivers, there could be a bit more volatility if there are some chart break-outs,” a trader said.
Moving forward, markets will be particularly interested in Friday’s US jobs report – expected to show 160,000 jobs added in May.
The data point has taken on greater importance since the Federal Open Market Committee (FOMC) April meeting minutes showed a number of policy-board members were growing more comfortable with a summer rate hike.
While some doves remain, an improving labour market coupled with signs of inflation and wage growth is leading most central bankers to at least consider a June rate hike.
Still, only 23 percent of market participants are expecting a hike next month, with 58 percent pricing-in a hike in July, according to the CME Group FedWatch.
“Echoing recent comments from many of her colleagues including Boston Fed President Eric Rosengren and San Francisco’s John Williams, [Yellen] appears more than willing to support another rate hike sooner than later, dispelling fears she would oppose a more hawkish majority,” Lindsey M. Piegza, Chief Economist at Stifel, said.
In a busy US data day, Chicago PMI in May disappointed at 49.3, below the estimate of 50.8 and officially in contraction territory. CB consumer confidence over the same period was at 92.6, missing the forecast of 96.1.
CORE PCE price index month-over-month in April was in-line with expectations at 0.2 percent, while personal spending and income gained 1.0 percent and 0.4 percent respectively, besting or as expected with the estimates of 0.7 percent and 0.4 percent.
Turning to US markets, the Dow Jones industrial average and S&P were last down 0.7 percent and 0.4 percent respectively, while the dollar was unchanged at $1.1138 against the euro.
As for other commodities, light sweet crude (WTI) oil futures on the Nymex reversed down 41 cents or 0.8 percent to $48.92 per barrel while the most-actively traded Comex silver contract fell 26.4 cents or 1.6 percent to $16.005 per ounce.
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Source: Bullion Desk News
