Gold / Silver / Copper futures - Weekly review: September 16 - 20

             Gold futures plunged nearly 3% on Friday, amid ongoing uncertainty over the future of the Federal Reserve's stimulus program.

On the Comex division of the New York Mercantile Exchange, gold futures for December delivery tumbled 2.7% on Friday to settle the week at USD1,332.50 a troy ounce. 

Gold futures fell by as much as 3.2% earlier in the session to hit a daily low of USD1,325.10 a troy ounce. The December contract settled 4.7% higher at USD1,369.30 a troy ounce on Thursday.

Gold futures were likely to find support at USD1,291.70 a troy ounce, the low from September 18 and resistance at USD1,375.10, the high from September 19.

Despite Friday’s sharp decline, gold prices still ended the week with a 0.5% gain, due to Thursday’s sharp rally. 

Gold prices soared by as much as 4.5% on Thursday after the Fed decided to leave its USD85 billion-a-month stimulus program unchanged.

The decision surprised markets, which had been expecting the central bank to taper its monthly stimulus program by USD10 billion to USD15 billion.

In a press conference following the Fed statement, Chairman Ben Bernanke reiterated that the plan to taper asset purchases was never a "preset course," and added that the bank's decision was dependent on how the economic recovery continues to progress.

The central bank also repeated its ongoing goal to keep low interest rates in place until the unemployment rate falls to around 6.5%, as long as inflation doesn't accelerate beyond 2.5% a year.

But the precious metal came under heavy selling pressure on Friday after St. Louis Fed President James Bullard said the decision not to taper in September was “close” and did not rule out a small reduction in the central bank's bond purchases in October. 

The Fed will hold its next monetary policy meeting on Oct. 29-30.

Moves in the gold price this year have largely tracked shifting expectations as to whether the U.S. central bank would end its quantitative easing program sooner-than-expected.

The dollar strengthened against the euro and the yen following Bullard’s comments, further weighing on gold prices.

Gold prices often move inversely to the U.S. dollar, as gold becomes more expensive for buyers using other currencies.

In the week ahead, uncertainty over the direction of the Fed’s monetary policy and the decision over Chairman Ben Bernanke’s eventual successor look likely to influence gold prices. 

The precious metal is on track to post a loss of nearly 22% on the year as traders bet an improving U.S. economy would lead the Fed to unwind its stimulus program by the year's end.

Elsewhere on the Comex, silver for December delivery plummeted 5.85% on Friday to settle the week at USD21.92 a troy ounce. Silver prices settled 8% higher at USD23.29 on Thursday.

On the week, silver future prices declined 1.45%.

Meanwhile, copper for December delivery dropped 0.8% on Friday to close the week at USD3.320 a pound. On Thursday, copper futures rallied 2.1% to settle at USD3.347 a pound.

Prices of the red metal advanced 3% on the week.

Copper traders will be closely watching a preliminary reading of China’s HSBC manufacturing index on Monday, to gauge the economic strength of the world’s largest copper consumer.   - investing.com