September 26 – 30 Gold, Silver, Copper Futures Weekly Outlook

On Friday, gold prices inched lower, but notched the strongest weekly advance in nearly two months after the Federal Reserve held off on increasing interest rates and scaled back the number of rate hikes it anticipate the coming year.

The precious metal is sensitive to moves in U.S. rates, which boost the opportunity cost of holding non yielding assets like bullion. A slow path to higher rates is seen as less of a risk to gold prices than a swift series of increases.

Delivery of gold for December on the Comex division of the NYMEX plunged $3.00, or 0.22%, to settle at $1,341.70 a troy ounce by close of trade. On Thursday, prices increased suddenly to $1,347.80, the most since September 7.

During the week, the yellow metal ended with an increase of $31.50, or 2.34%, the best performance since the week ended July 29.

The Fed Reserve left interest rates unmoved at the conclusion of its policy meeting on Wednesday, but indicated that a hike could happen in December if the job market continued to recover.

Together, the U.S. central bank also reduces the figure of rate hikes it will anticipate next year and in 2018, according to sources.

The U.S. dollar index, which gauges the greenback’s value compared to a basket of six major currencies, ended the week at 95.40, not so distant from the previous day’s two week low of 94.94.

The index lost 0.75 percent on the week as markets stay uncertain that U.S. policymakers expect to tighten policy in the upcoming months.

Weakness of Dollar generally benefits gold, as it increases the metal’s demand as an alternative asset and makes dollar priced commodities inexpensive for holders of other currencies.

Also on the Comex, delivery of  silver futures for December dropped 28.9 cents, or 1.44%, on Friday to settle at $19.81 a troy ounce. On Thursday, the contract increase to $20.14, a level not met since September 7. For the week, silver soared 96.5 cents, or 5.03%.

Somewhere else in metals trading, delivery of copper for December eased up 0.6 cents, or 0.3 percent, on Friday to end at $2.201 a pound after reaching a daily peak of $2.206, the most since August 2.

During the week, New York-traded copper prices increased 5.5 cents, or 1.91 percent, the 3rd weekly increase in a row, during indications that China’s economy is recovering strength and signs that global central banks will remain accommodative.

In the meantime, investors will be concentrating on a pair of speeches from European Central Bank President Mario Draghi for fresh hints on whether the European Central Bank will increase monetary stimulus in the upcoming months to increase inflation and sustain the economy.

Furthermore, statements by Bank of Japan Governor Haruhiko Kuroda will be watched in the wake of last week’s decision by the Bank of Japan to modify its policy framework.

First U.S. presidential debate will happen on Monday, another big event for the market.

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