December 12 to 16 Weekly Outlook: Gold / Silver / Copper futures

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On Friday, gold prices reach fresh 10-month lows and the precious metal published its fifth straight weekly dropped as projections of higher U.S. interest rates continued to weigh.

Deliver of gold for February settled down 0.94% at $1,161.4 on the Comex division of the New York Mercantile Exchange.  It was the metals lowest close since February 5. During the week, gold declined 1.34%.

On Friday, the greenback increase during widespread anticipations that the Fed Reserve will hike interest rates at the end of its policy meeting on Wednesday.

Investors are pricing in a 100% possibility of an increase at the meeting, according to the reports.

The U.S. dollar index, that gauges the dollar’s strong point against a trade-weighted basket of six major currencies, increased 0.48% to 101.60 late Friday. For the week, the index increased 0.75%.

Higher rates increase the dollar by making the currency more eye-catching to yield-seeking investors.

Both a strong greenback and higher interest rates are normally bearish for gold, which is denominated in dollars and struggles to compete with yield-bearing assets when borrowing costs increases.

Gold prices have dropped since Donald Trump was elected president as increasing U.S. bond yields and a rally in stock markets have restrained its appeal.

Somewhere else in metals trading, delivery of silver in March declined 0.94% at $16.93 a troy ounce, while delivery of  copper for March settled at $2.65 a pound.

Platinum dropped 2.3% to $916.1 and palladium ended at $731.0 an ounce, after declining to its lowest since November 18 in the prior session.

In the week onward, investors will be looking for possible indication from the Fed on the pace of rate hikes the upcoming year and market observers will be awaiting a number of U.S. economic reports, including figures on retail sales and inflation for fresh indications on how the economy is performing in the final quarter.

On Additional News

On December 12, Japan is to post data on core machinery orders and producer prices.The U.K. is to post industry data on house prices.

On Tuesday, December 13, China is to produce  statistic on industrial output and fixed asset investment. The U.K. is to report on consumer price inflation. The ZEW Institute is to report on German economic sentiment.

On December 14, Japan is to post the Tankan manufacturing and non-manufacturing indexes.

The U.K. is to publish its carefully observed monthly jobs report.

The U.S. is to post data on retail sales, industrial production and producer prices.

The Fed Reserve is to post its benchmark interest rate and announce updated economic projections. Fed Reserve Chair Janet Yellen will hold a press conference to outline economic conditions and the factors influencing  the monetary policy decision.

On December 15, Australia is to post its monthly jobs report.  The euro zone is to post its preliminary estimates on private sector business activity.

The Swiss National Bank is to declare its latest monetary policy decision and hold a press conference to talk about the economic outlook.

The U.K. is to release data on retail sales and the Bank of England is to declare its current monetary policy decision.  Canada is to post data on manufacturing sales.

The U.S. is to publish a raft of data, together with reports on consumer prices, jobless claims and manufacturing activity in both the Philadelphia and New York regions.

Friday, December 16, the euro zone is to publish revised data on inflation.

The U.S. is to round up the week with reports on building permits and housing starts.

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