Copper Remains Near Recent Highs While Gold Continues To Bottom

                  Gold is trading at 1292.60 adding $1.80 but remaining weak as the US dollar maintains its strength. Silver added 83 points to reach 20.498 and platinum is flat at 1472.10. Gold futures fell to the lowest in five weeks in New York as the outlook for an improving global economy reduced demand for a haven. 

A preliminary China Purchasing Managers’ Index from HSBC Holdings Plc and Markit Economics rose to an 18-month high. U.S. jobless claims fell to the lowest since February 2006 last week, a government report today showed. The Standard & Poor’s 500 Index of stocks closed at a record yesterday. The decline extends losses this month for bullion after unrest in Ukraine and the Middle East helped prices rebound 10 percent in the first half of 2014. Goldman Sachs Group Inc. reiterated a call for gold to drop further by year-end with an accelerating U.S. recovery, even as the bank raised its long-term forecast on the metal.

Prices for the yellow metal fell 1 percent to below $1,300 an ounce as the dollar and stock markets rose on surprisingly low weekly jobless claims and robust corporate earnings out of the United States. 

Data from Europe showed the services sector in the 18-member euro zone performing better than any forecast from 39 economists in a Reuter’s poll. All that diverted investor attention from the clashes in Gaza between Hamas and Israel, as well as the tensions in the Crimean region after the sanctions on Russia and the downing of a Malaysian passenger jet, that sent bullion rallying last week.

Goldman repeated a forecast for gold to drop to $1,050 by the end of 2014, analysts wrote in a report dated yesterday. The bank said it raised its long-term forecast 13 percent to $1,200 in 2014-dollar terms “to make it more in line with our marginal-cost support level.”

Data from the China Gold Association yesterday showed consumption in the country, which surpassed India as the largest user last year, fell 19 percent in the first half of 2014.

Copper gave up a few points this morning as traders booked profits after Thursday’s rally on Chinese data. Copper is trading at 3.255. Copper dropped for the first time this week as investors viewed a rally to the highest price since July 14 as excessive amid rising global supplies.

Copper is down 2.8 percent this year, the most among the six main metals on the LME. Global supply will exceed demand by 353,000 tons in 2014 and by 492,000 tons in 2015, according to Goldman Sachs Group Inc. Goldman cut its 12-month estimate for copper to $6,200 a ton from $6,600 due to rising output and exposure to a weak property market in China, the biggest user. Copper futures rose the most in three weeks as a gauge of manufacturing climbed to an 18-month high in China, the world’s top consumer of industrial metals.

China’s factory measure from HSBC Holdings Plc and Markit Economics showed a preliminary July reading of 52, compared with the 51 median estimates of analysts surveyed. A level above 50 indicates expansion. Copper inventories monitored by the London Metal Exchange extended a slump to the lowest since August 2008. - Fxempire