Gold /Silver / Copper futures - Weekly outlook: August 19 – 23

Investing.com - Gold futures rallied to an eight-week high on Friday, after a series of downbeat U.S. economic data dampened speculation the Federal Reserve will begin to taper its bond-buying program as soon as September.

Moves in the gold price this year have largely tracked shifting expectations as to whether the U.S. central bank would end its quantitative easing program sooner-than-expected.

On the Comex division of the New York Mercantile Exchange, gold futures for December delivery jumped 1.15% on Friday to settle the week at USD1,376.30 a troy ounce.

Earlier in the session gold prices hit USD1,379.10 a troy ounce, the highest level since June 18.

Gold futures were likely to find support at USD1,304.50 a troy ounce, the low from August 9 and near-term resistance at USD1,391.35, the high from June 17.

Gold prices added 4.55% on the week, the strongest gain since the week ending July 12. The precious metal has rebounded 16% since hitting a 34-month low of USD1,180.15 a troy ounce on June 28.

Gold found support after the University of Michigan said its consumer sentiment index fell from a six-year high of 85.1 in July to 80.0 in August. Economists had expected the index to tick up to 85.5.

Separate reports showed that U.S. housing starts rose less-than-expected in July and building permits also fell short of expectations last month.

Gold traders have closely been looking out for U.S. data reports recently to gauge if they will strengthen or weaken the case for the Fed to reduce its bond purchases.

Any improvement in the U.S. economy was likely to reinforce the view that the central bank will begin to taper its bond purchase program in the coming months.

An exit from the stimulus would deal a heavy blow to gold, which has thrived on demand from investors who buy gold to hedge against the inflationary risks of loose monetary policies.

In the week ahead, investors will be looking ahead to Wednesday’s minutes of the Federal Reserve’s most recent meeting, while U.S. data on initial jobless claims and the housing sector will also be closely watched.

Elsewhere on the Comex, silver for September delivery rallied 1.3% on Friday to settle the week at USD23.23 a troy ounce, the strongest level since May 15.

On the week, silver future prices surged 11.7%, the biggest weekly advance since September 2008.

Silver prices are up 24% since hitting a three-year low of USD18.19 on June 28, placing it firmly in bull-market territory.

Meanwhile, copper for September delivery rose 0.75% on Friday to close the week at USD3.362 a pound, the highest since June 5. The red metal gained 1.55% on the week, the second consecutive weekly advance.

The industrial metal was boosted after a raft of upbeat global economic data fuelled hopes for higher demand for the metal.

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