By Claudia Assis and Virginia Harrison, MarketWatch
SAN FRANCISCO (MarketWatch) — Gold and silver futures gained Tuesday, as traders jumped back into precious metals after steep losses last week.
Gold for June delivery GCM11 +0.64% added $5.90, or 0.4%, to $1,509.10 an ounce on the Comex division of the New York Mercantile Exchange.
Silver extended its rebound, with the July contract SIN11 +3.30% gaining $2.50, or 2.5%, to $38.01 an ounce. The metal led the commodities’ rebound in Monday’s session, closing 5% higher, as concerns about European debt woes heightened the appeal of precious metals.
Despite recent selloffs in metals, gold futures are trading 6.1% higher this year, while silver has gained 21.4%, according to data from FactSet.
“Liquidity in the market has been a driving force of commodity prices. Although QE is likely to come to end in the U.S., it is likely that we will still have ample liquidity around for some time to come. A lot of that liquidity has found its way into risky assets,” BNP Paribas chief metals strategist Stephen Briggs said at a briefing in Sydney.
“Generally speaking the liquidity will be slowly reduced over the coming months. If that is going to be gradually withdrawn, it may represent a slight headwind over the coming year,” Briggs said
The U.S. dollar index DXY -0.08% , which measures the greenback against a basket of six major currencies, advanced to 74.831 from 74.690 late Monday in North American trade.
“On a year’s view, the dollar will start strengthening again. Dollar weakness [has been] a positive push for dollar-priced commodities. That is going to be another slight headwind,” Briggs said.
The broader metals complex was mixed in electronic trading Tuesday, with copper for July delivery HGN11 +0.19% retreating less than 1 cent, or 0.1%, to $4.01 a pound.
Chinese authorities said Tuesday the country’s copper and copper product imports fell by almost 14% month-on-month to 262,700 metric tons, analysts at Commerzbank said in a note to clients Tuesday. Year-on-year, copper imports fell about 40%, they added.
The decline came as China’s high domestic production has significantly reduced the need to import, and high inventories have pushed “local prices down, making the import of more expensive foreign material less attractive,” the analysts said.
“There is some sign of improvement with inventories, though: copper stocks in warehouses of the Shanghai Futures Exchange have steadily fallen in the past seven weeks, indicating higher demand. This is being supported by falling prices and by itself should in turn prevent a sharp slump in copper prices,” they added.
China’s trade surplus widened more than analysts expected, raising concerns about global demand. Read more about China's surplus.
Sister metals platinum and palladium diverged, with July platinum PLN11 +0.08% falling $2.30, or 0.1%, to $1,792.80 an ounce, while palladium for June delivery added $4.50, or 0.6%, to $733.50 an ounce.
