Gold, silver futures climb to 2-week high on Fed easing outlook

Gold futures traded at the highest level in two weeks during European morning hours on Tuesday, as sentiment on precious metal was underpinned after Federal Reserve Chairman Ben Bernanke indicated that the central bank intended to continue its quantitative easing program.
In a speech on the economy and monetary policy on Monday, Fed Chief Ben Bernanke said that he was still unsatisfied with the economy’s progress, despite some recent signs of improvement.

Bernanke made no mention of winding the program down, clearing some confusion caused by the most recent Fed meeting minutes.

Gold futures tumbled to a four-month low on January 4 after the minutes from the central bank’s December meeting indicated that it could end its quantitative easing program earlier-than-expected.

The Fed’s bond buying program is viewed by many investors as a major source of liquidity that weakens the U.S. dollar and helps support prices of commodities and other hard assets, including gold.

Focus was expected to remain on the U.S. economy, as investors remained jittery with negotiations on raising the U.S. debt ceiling still to come in February.

On Monday, President Barack Obama warned Congress that it must raise the debt ceiling or risk a "self-inflicted wound on the economy."

Fed Chairman Ben Bernanke and Treasury Secretary Timothy Geithner also urged policymakers to act swiftly in order to prevent a potential debt default.

Expectations for more aggressive easing measures by the Bank of Japan also contributed to gains after Japanese Prime Minister Shinzo Abe called for the central bank to adopt a 2% targeted inflation rate over the weekend.

Loose monetary policies employed by central banks around the world have helped boost demand for gold in recent years as investors sought the precious metal as a hedge against currency debasement.

Elsewhere on the Comex, silver for March delivery rose 0.6% to trade at USD31.30 a troy ounce, while copper for March delivery dipped 0.2% to trade at USD3.627 a pound.

Copper traders were looking ahead to data from China on fourth quarter gross domestic product for signs of a recovery in the world’s second-largest economy.

The Asian nation is set to release government data on the size of its economy on January 18. China is the world’s largest copper consumer, accounting for almost 40% of world consumption last year.

Crude oil futures edge lower on U.S. debt concerns

Crude oil futures inched lower during European morning hours on Tuesday, as fresh concerns over the U.S. debt ceiling weighed on appetite for growth-linked assets.


Oil prices came under pressure as investors remained cautious ahead of negotiations on raising the U.S. debt ceiling still to come in February.

On Monday, President Barack Obama warned Congress that it must raise the debt ceiling or risk a "self-inflicted wound on the economy."

Federal Reserve Chairman Ben Bernanke and Treasury Secretary Timothy Geithner also urged policymakers to act swiftly in order to prevent a potential debt default.

Losses were limited as the U.S. dollar came under pressure after Fed Chief Bernanke indicated that the central bank intended to continue its quantitative easing program.

In a speech on the economy and monetary policy on Monday, Fed Chief Ben Bernanke said that he was still unsatisfied with the economy’s progress, despite some recent signs of improvement.

Bernanke made no mention of winding the program down, clearing some confusion caused by the most recent Fed meeting minutes.

Oil traders looked ahead to fresh weekly information on U.S. stockpiles of crude and refined products to gauge the strength of oil demand in the world’s largest oil consumer.

The American Petroleum Institute will release its inventories report later in the day, while Wednesday’s government report could show crude stockpiles rose by 2 million barrels.

The U.S. is the world’s biggest oil-consuming country, responsible for almost 22% of global oil demand.

Market players were also looking ahead to key Chinese economic data later in the week. The Asian nation is slated to release data on fourth quarter gross domestic product on Friday, along with reports on industrial production and retail sales.

China is the world's second largest oil consumer after the U.S. and has been the engine of strengthening demand.

Copper falls to 2-week low with U.S. debt ceiling, China data in focus

Copper futures fell to the lowest level in two weeks during European morning hours on Tuesday, as appetite for growth-linked assets weakened amid fresh concerns over the U.S. debt ceiling.

On the Comex division of the New York Mercantile Exchange, copper futures for March delivery traded at USD3.626 a pound during European morning trade, down 0.2% on the day.

New York-traded copper prices fell by as much as 0.35% earlier in the session to hit a daily low of USD3.623 a pound, the weakest level since December 31.

Copper prices came under pressure as investors remained cautious ahead of negotiations on raising the U.S. debt ceiling still to come in February.

On Monday, President Barack Obama warned Congress that it must raise the debt ceiling or risk a "self-inflicted wound on the economy."

Federal Reserve Chairman Ben Bernanke and Treasury Secretary Timothy Geithner also urged policymakers to act swiftly in order to prevent a potential debt default.

Losses were limited as the U.S. dollar came under pressure after Fed Chief Bernanke indicated that the central bank intended to continue its quantitative easing program.

In a speech on the economy and monetary policy on Monday, Fed Chief Ben Bernanke said that he was still unsatisfied with the economy’s progress, despite some recent signs of improvement.

Bernanke made no mention of winding the program down, clearing some confusion caused by the most recent Fed meeting minutes.

Copper traders now looked ahead to key Chinese economic data later in the week to gauge the strength of the country’s economic recovery.

The Asian nation is slated to release data on fourth quarter gross domestic product on Friday, along with reports on industrial production and retail sales.

China is the world’s largest copper consumer, accounting for almost 40% of world consumption last year