Gold, copper braced for losses on rising dollar

There still could be room for gold and copper futures to fall in the wake of Friday's sell-off on international markets, especially following the rally in the US dollar.

The most traded gold contract on the Shanghai Futures Exchange (SHFE) lost 0.85 percent Friday to close at 251.30 yuan ($40.97) per gram, or $1,274.44 per ounce. The contract managed to rebound 2.98 percent following its 6.7 percent plunge in the previous week.

In comparison, the August gold future on Comex in the US surrendered almost 3 percent Friday to settle at $1,212.70 per ounce for the week, leaving space for SHFE gold to fall Monday.

In industrial metals, the most traded SHFE copper contract shed 1.42 percent Friday to close at 49,220 yuan per ton, though it still managed to hold on to a gain of 1.65 percent for the week.

The benchmark three-month copper contract on the London Metal Exchange (LME) gave up 2.3 percent Friday to finish at $6,768 per ton, a loss which erased its gains for the week.

Both copper and gold prices lost ground due to a rise in the US dollar, which shot to a three-year high in Friday trading. The US Dollar Index, which measures the dollar against a basket of major global currencies, jumped 1.5 percent last week to finish at 84.44.

The dollar rose on strong jobs growth in the US's closely followed monthly employment report. The country's non-farm payrolls report found that employers added 195,000 jobs in June, according to the US Bureau of Labor Statistics.

The June increase surpassed expectations that the US economy would add 165,000 jobs, according to Reuters.

The jobs numbers themselves helped other sectors within the international commodities market. The price of Nymex crude oil spiked 6.9 percent last week to settle at $103.22 per barrel on the back of solid economic data out of the US as well as renewed political turmoil in Egypt, Reuters reported.