Gold / Silver / Copper futures - weekly outlook: November 2 - 6

November 1, 2015

New York (Nov 1)  Gold futures slumped to a three-week low on Friday, amid speculation the Federal Reserve may still raise interest rates this year.

Gold for December delivery on the Comex division of the New York Mercantile Exchange declined $5.90, or 0.51%, on Friday to close at $1,141.40 a troy ounce. It earlier fell to $1,138.40, the lowest since October 9.

On Thursday, gold plunged $28.80, or 2.45%, after the Fed signaled that a December rate hike was still on the table.

For the week, prices of the precious metal lost $23.60, or 1.87%, the largest weekly drop since the week ended August 28.

The U.S. central bank left interest rates unchanged following a two-day policy meeting on Wednesday, as widely expected, but surprised the market with a hawkish statement, which included a direct reference to its next policy meeting.

The Fed's statement did not repeat that global risks would have a likely impact on the U.S. economy, as it warned at its last meeting in September. Investors interpreted that omission as a hawkish signal in deciding when to raise rates.

In recent weeks, investors had pushed back expectations for a rate increase to March 2016 due to weakness in the global economy and its impact on U.S. growth prospects.

Market players have been trying to gauge when the Federal Reserve will raise interest rates for the first time in nearly a decade after recent economic reports offered a mixed picture of the U.S. economy.

The Commerce Department reported on Thursday that the U.S. economy grew at an annual rate of 1.5% in the three months to September, missing expectations for growth of 1.6%.

The timing of a Fed rate hike has been a constant source of debate in the markets in recent months. The U.S. central bank has one more scheduled policy meeting before the end of the year in mid-December.

Also on the Comex, silver futures for December delivery inched up 1.7 cents, or 0.11%, on Friday to settle at $15.56 a troy ounce by close of trade. On the week, silver futures slumped 27.8 cents, or 1.64%.

Elsewhere in metals trading, copper for December delivery dipped 0.3 cents, or 0.15%, on Friday to settle at $2.317 a pound. Prices fell to $2.309 earlier, a level not seen since October 2.

For the week, copper prices declined 3.7 cents, or 1.57%, as persistent worries about future demand from top consumer China weighed.

Data released Sunday showed that the official China's manufacturing purchasing managers' index held steady at 49.8 in October, the weakest level since August 2012. Analysts had expected the index to inch up to 50.0 last month.

A reading below 50.0 indicates industry contraction. Copper traders view Chinese factory activity as an indicator of the nation's copper demand, as the red metal is widely used by the sector.

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

In the week ahead, investors will be focusing on Friday’s U.S. jobs report for October, which could help to provide clarity on the likelihood of a near-term interest rate hike.

Markets will also be watching surveys of the manufacturing and service sectors, factory orders and trade data from the world’s largest economy for fresh indications on the timing of a rate hike.

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


Silver Phoenix Twitter                 Silver Phoenix on Facebook