Gold Futures Shine as Metals Sector Declines

December 19, 2016 6:26AM CST

Commodities futures markets are entering a quiet week of trading as many participants bow out ahead of the U.S. Christmas holiday this weekend and subsequent vacations before and afterward.

Gold futures, however, are still shining brightly in pre-holiday trade amid a subdued trading day in metals futures. As U.S. dollar index futures drifted lower on Monday, weakening .20 percent to 102.720, gold futures prices continued to climb, although analysts say expectations of tighter U.S. monetary policy will keep growth curbed in the near future.

The February contract in gold futures climbed .44 percent to $1,142.3 an ounce in mid-day commodities futures trading. Some analysts say buying of the yellow metal by jewelers and investors is propping up prices, while many say the safe-haven status is also supportive during year-end economic certainty.

Meanwhile the rest of the metals sector of commodities futures markets was mostly lower. March silver futures traded down .77 percent at $16.085, while March copper futures prices slumped 2.81 percent. The drop comes even as President-elect Donald Trump’s administration promises massive stimulus programs, therefore increasing demand for copper.

Many commodities futures markets are awaiting Federal Reserve Chair Janet Yellen’s speech early this afternoon, in which will address the University of Baltimore Mid-Year Commencement. The speech is the last from the Fed for the year and the first remarks since the central bank opted to hike rates by 25 basis points at its meeting last week.

The December U.S. Services Purchasing Managers Index fell to 53.4 in December, according to market research group Markit compared to November’s reading of 54.6.and compared to expectations of a 55.2 reading. In addition, the Composite Index portion of the report registered 53.7 in December, down from 54.9 in November, the slowest growth in private sector output for three months.

The remainder of this week’s economic calendar is light ahead of the holiday weekend, with the first major report on Wednesday in the form of November Existing Home Sales. The third estimate of third-quarter GDP is due Thursday, along with Durable Goods Orders and Leading Indicators for November. Personal Income and Spending for the same month is slated for release the same day, as well as the November Core PCE Price Index. The week ends with the University of Michigan Consumer Sentiment final reading for December and November New Home Sales, though many commodities futures markets participants may leave early due to the holiday.

Gold Feb'17 Daily Chart

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