Metals market: Gold and Copper quotes tumble

18.02.2013 18:07
Metals market: Gold and Copper quotes tumble

YEREVAN, February 18. /ARKA/. Gold prices sharply tumbled over the past five trading days as investors were getting more prone to risky assets. Moreover, the limited physical demand amid holidays in Asia and no vivid growth catalysts didn’t cast any optimism burying gold market in further uncertainty.

Meanwhile, the published report of the World Gold Council showed global demand for gold dropped by 3.86% to 4405,5 tons in 2012. Thus, the report gave no positive orients.

Gold prices sharply dropped at the end of the week amid more optimistic than expected macroeconomic statistics from overseas which shadowed the perspectives for the stimulus measures in the US. Therefore, gold prices reached their new six-month minimum of 1,597.30 USD per troy ounce. Nevertheless, the prices slightly restored as the main currency pair got back to its earlier stable positions. As a result, gold cost downed by 3.46% to 1,608.66 USD per troy ounce, which was the most touchable cliff since last May.

This week, the gold quotes will continue to be pressured as there is still fog around the middle-term perspectives for this assets amid the improved global macroeconomic statistics and investors’ route to risky deals. However, we don’t exclude the scenario where the quotes of this asset may consolidate amid quiet trades ahead of the publication of the US Federal Reserve’s protocols from the last session, February 20. Furthermore, it is important to note that on Monday the US banks will be closed on a non-working banking day. That’s why the investors’ active participation may be restricted.

One of the most principal trading orients for investors this week will be FOMC protocols which can imply possible earlier terms for the termination of the quantitative stimulation program. As the last statements made by Federal Reserve representatives confirm there are still disputes around monetary and credit policy. If these expectations come true, the gold quotes may be damaged. The supporting benchmark for the gold this week may be 1,583.0 USD per troy ounce.

Gold quotes may depend on macroeconomic statistics from the US and eurozone. Of the American news we should focus on the publication of consumer price index from housing market for January, manufacturing activity index from Federal Reserve Philadelphia for February and the number of the primary unemployment allowance applications for the last week. Of the European news we should highlight business sentiments index by ZEW institute, business conditions index by IFO for February and preliminary figures on PMI for manufacturing sector for February. According to the expectations, the moderately positive statistics from overseas and good data from eurozone may support the gold quotes. The resistance benchmark for the next five trading sessions can be 1,630.0 USD per troy ounce.

Copper price dropped by 0.70% to 3.7340 USD per pound last week. The sharpest tumble was reported last Monday amid zero demand by global consumer, China, and price falls at other commodities market.

Slightly increased reserve of this asset at London Metal Exchange also prevented hike in copper quotes.

Copper quotes this week can restore as the Asian markets are getting back to their normal activity. Federal Reserve’s final protocols may also influence the copper prices.

Copper dynamics will also depend on macroeconomic statistics from the US and eurozone. This statistics is expected to be moderately positive. If these forecasts come true, the prices for non-ferrous metals, including the copper, may rise.

However, if this statistics doesn’t meet the expectations, and the American currency grows again, copper cost may drop. The anticipated fluctuation range may be 3.68 – 3.78 USD this week.

Mikael Verdyan, an analyst at FOREX CLUB, specially for ARKA news agency.
The opinion of the author does not necessarily reflect that of the agency.—0-

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