Gold / Silver / Copper futures - weekly outlook: November 24 - 28

Investing.com - Gold prices rallied to a three-week high on Friday, after China’s central bank unexpectedly cut interest rates for the first time in more than two years.

On the Comex division of the New York Mercantile Exchange, gold futures for December delivery rose to a session high of $1,207.60 a troy ounce, the most since October 30, before settling at $1,197.70 by close of trade, up $6.80, or 0.57%.

On the week, gold prices rose $12.10, or 1.01%, the second consecutive weekly gain.

Futures were likely to find support at $1,173.90, the low from November 19, and resistance at $1,216.50, the high from October 30.

Gold prices rose on news that the People's Bank of China cut its benchmark one-year deposit rate by 25 basis points to 2.75% and trimmed its one-year lending rate by 40 basis points to 5.6%.

The move came in response to recent signs of a slowdown in the world’s second-largest economy.

Gold can benefit from such an environment of easy money because of expectations that ample liquidity would put a damper on the value of paper currencies.

Meanwhile, European Central Bank President Mario Draghi reiterated on Friday that the central bank is ready to expand its stimulus program to raise inflation and inflation expectations as quickly as possible.

Draghi also warned about weak growth in the euro zone, saying that no improvements are expected in the coming months.

The ECB's current stimulus program includes purchases of asset-backed securities and covered bonds, though markets are keeping a close eye out for plans to announce purchases of government debt, a stimulus tool known as quantitative easing.

Expectations of monetary stimulus tend to benefit gold, as the metal is seen as a safe store of value and inflation hedge.

Despite Friday's upbeat performance, gold prices are likely to remain vulnerable in the near-term amid indications a strengthening U.S. economic recovery will force the Federal Reserve to start raising interest rates sooner and faster than previously thought.

In the week ahead, the U.S. is to release a string of economic reports on Wednesday due to Thursday’s Thanksgiving holiday, including a look at unemployment claims and durable goods orders.

Data from the Commodities Futures Trading Commission released Friday showed that hedge funds and money managers significantly increased their bullish bets in gold futures in the week ending November 18.

Net longs totaled 60,307 contracts, up 35.7% from net longs of 38,763 in the preceding week.

Also on the Comex, silver futures for December delivery climbed 25.8 cents, or 1.6%, on Friday to settle the week at $16.39 a troy ounce by close of trade.

Prices hit a daily peak of $16.60 an ounce earlier Friday, the highest level since October 30.

The December silver futures contract tacked on 8.0 cents, or 0.48%, on the week, the second straight weekly advance.

According to the CFTC, net silver longs totaled 745 contracts as of last week, compared to net shorts of 1,983 contracts in the preceding week.

Elsewhere in metals trading, copper for December delivery inched up 1.2 cents, or 0.4%, on Friday to settle at $3.031 a pound by a close of trade.

Prices rallied to a session high of $3.077 earlier in the day, before paring gains towards the end of the session, as traders weighed whether a surprise rate cut in China would translate into an increase in demand for the industrial metal.

The Asian nation is the world’s largest copper consumer, accounting for almost 40% of world consumption last year.

Despite Friday's gains, Comex copper prices shed 1.5 cents, or 0.49%, on the week, amid ongoing concerns over the health of the global economy.

Copper is sensitive to the economic growth outlook because of its widespread uses across industries.

According to the CFTC, net copper shorts totaled 1,304 contracts as of last week, compared to net shorts of 1,664 contracts in the preceding week.