COMEX WEEKLY OUTLOOK: March 9 – 13
Gold / Silver / Copper futures
Gold plunged to the lowest level in more than three months
on Friday, as robust U.S. nonfarm payrolls data boosted expectations that the
Federal Reserve will start raising rates sooner rather than later.
On the Comex division of the New York Mercantile Exchange, gold futures for
April delivery hit an intraday low of $1,162.90 a troy ounce, a level not seen
since December 1, before ending at $1,164.30 by close of trade, down $31.90, or
2.67%.
It was the biggest one-day loss since December 2013 and
helped wipe out the precious metal's gains so far this year.
For the week, gold slumped $49.50, or 4.02%, the worst
weekly decline since late-October.
Futures were likely to find support at $1,141.70, the low
from December 1, and resistance at $1,208.90, the high from March 5.
The Labor Department reported that the U.S. economy added
295,000 jobs in February, far more than the 240,000 forecast by economists,
while the unemployment rate ticked down to 5.5% from 5.7% in January, the
lowest since May 2008.
The robust jobs report fuelled expectations that the Federal
Reserve will start raising interest rates as early as June.
Expectations of higher borrowing rates going forward is
considered bearish for gold, as the precious metal struggles to compete with
yield-bearing assets when rates are on the rise.
The dollar index, which
measures the greenback’s strength against a trade-weighted basket of six major
currencies, jumped 1.39% to 97.74 late Friday, the highest since September
2003.
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, the euro sank to an
11-year low against the dollar after European Central Bank President Mario
Draghi confirmed that it will begin purchasing euro zone government bonds on
Monday under its new quantitative easing program.
The combined monthly asset purchases will amount to €60
billion per month and are expected to run until September 2016.
Elsewhere on the Comex, silver futures for
May delivery dropped 35.1 cents, or 2.17%, on Friday to settle at $15.80 a troy
ounce by close of trade. Prices touched a daily low of $15.74, the weakest
level since January 5.
The May silver futures contract lost 76.8 cents, or 4.54%,
on the week, tracking weakness in gold.
Meanwhile, copper for May
delivery inched slumped 4.3 cents, or 1.64%, on Friday to end at $2.609 a
pound, the lowest since February 24.
For the week, Comex copper declined 9.0 cents, or 3.08% amid
ongoing concerns over the health of China's economy.
The Asian nation is the world’s largest copper consumer,
accounting for almost 40% of world consumption last year.
On Sunday, China reported a trade surplus of $60.6 billion
in the January-February period, compared to expectations for a surplus of $10.8
billion and up from a surplus of $60.0 in January.
Exports surged 48.3% from a year earlier last month, above
expectations for a 14.2% increase, while imports tumbled 20.5%, much worse than
forecasts for a decline of 10.0%.
In the week ahead, markets will be watching talks on Greece
by euro zone finance ministers in Brussels on Monday, while Thursday’s U.S.
retail sales report will also be closely watched for further indications on the
strength of the recovery.
Ahead of the coming week, Investing.com has compiled a list
of these and other significant events likely to affect the markets.
Monday, March 9
Eurogroup finance ministers are to hold a meeting in
Brussels to discuss funding options for Greece.
Tuesday, March 10
China is to release reports on consumer and producer price
inflation.
Wednesday, March 11
China is to publish reports on industrial production and
fixed asset investment.
Thursday, March 12
The U.S. is to produce data on retail sales and initial
jobless claims.
Friday, March 13
The U.S. is to round up the week with data on producer
prices and consumer sentiment.