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

CommoditiesDec 11, 2016 13:47
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© Reuters. Gold closes at lowest level since February on Fed rate hike view - Gold prices touched fresh 10-month lows on Friday and the precious metal posted its fifth straight weekly decline as expectations for higher U.S. interest rates continued to weigh.

Gold for February delivery settled down 0.94% at $1,161.4 on the Comex division of the New York Mercantile Exchange. It was the metals lowest close since February 5. For the week, gold was down 1.34%.

The dollar rose on Friday amid widespread expectations that the Federal Reserve will hike interest rates at the conclusion of its policy meeting on Wednesday.

Investors are pricing in a 100% chance of an increase at the meeting, according to federal funds futures tracked's Fed Rate Monitor Tool.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.48% to 101.60 late Friday. For the week, the index was up 0.75%.

Higher rates boost the dollar by making the currency more attractive to yield-seeking investors.

Both a strong dollar and higher interest rates are typically bearish for gold, which is denominated in dollars and struggles to compete with yield-bearing assets when borrowing costs rise.

Gold prices have slumped since Donald Trump was elected president as rising U.S. bond yields and a rally in stocks markets have damped its appeal.

Elsewhere in metals trading, silver for March delivery was down 0.94% at $16.93 a troy ounce, while copper for March delivery settled at $2.65 a pound.

Platinum fell 2.3% to $916.1 and palladium ended at $731.0 an ounce, after falling to its lowest since November 18 in the previous session.

In the week ahead, investors will be looking for possible signals from the Fed on the pace of rate hikes next year and market watchers will be awaiting a number of U.S. economic reports, including figures on retail sales and inflation for fresh signs on how the economy is performing in the final quarter.

Ahead of the coming week, has compiled a list of these and other significant events likely to affect the markets.

Monday, December 12

Japan is to publish data on core machinery orders and producer prices.

The U.K. is to release industry data on house prices.

Tuesday, December 13

China is to produce data on industrial production and fixed asset investment.

The U.K. is to report on consumer price inflation.

The ZEW Institute is to report on German economic sentiment.

Wednesday, December 14

Japan is to publish the Tankan manufacturing and non-manufacturing indexes.

The U.K. is to publish its closely watched monthly jobs report.

The U.S. is to release data on retail sales, industrial production and producer prices.

The Fed is to announce its benchmark interest rate and publish updated economic projections. Fed Chair Janet Yellen will hold a press conference to outline economic conditions and the factors affecting the monetary policy decision.

Thursday, December 15

Australia is to publish its monthly jobs report.

The euro zone is to publish preliminary estimates on private sector business activity.

The Swiss National Bank is to announce its latest monetary policy decision and hold a press conference to discuss the economic outlook.

The U.K. is to release data on retail sales and the Bank of England is to announce its latest monetary policy decision.

Canada is to release data on manufacturing sales.

The U.S. is to release a raft of data, including reports on consumer prices, jobless claims and manufacturing activity in both the Philadelphia and New York regions.

Friday, December 16

The euro zone is to release revised data on inflation.

The U.S. is to round up the week with reports on building permits and housing starts.

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

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