Metals Prices in for Mixed Week

The prices of both base and precious metals are expected to trade mixed next week.
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NEW YORK (

TheStreet

) -- Prices of metals, both base and precious, traded higher during week helped by easing concerns over the eurozone crisis and positive economic data. The fact that global markets rallied helped the cause as well.

The

S&P 500

index closed nearly 4% up Thursday following positive news on the economic front, the most notable being new orders for durable goods, which were up 2.9% during April as opposed to a 1.2% decline in March.

U.S. gross domestic product growth stood at 3% for the first quarter compared with 3.2% in the previous quarter. Furthermore, initial jobless claims fell by 11,000 to 460,000 from the previous week's 471,000.

Lastly, continuing claims dipped by 18,000 to 4.607 million during the week ended May 15 from 4.625 million in the previous week. New-home sales for April jumped 22.6% to 504,000 from 411,000 during March.

Gold

Gold retreated from its weekly highs as investors favored rallies in the euro and equity markets. Although the World Gold Council believes that demand will rebound this year on higher investment and jewelry demand, positive news flow on the European Union front may weaken the metal in the near term.

SPDR Gold Trust

(GLD) - Get Report

reported gold holdings of 1,267.93 metric tonnes, up by a marginal 0.30 tonnes.

Gold was down 0.12% at $1,211.90 an ounce in Asian trading hours as the metal could not hold gains subsequent to China's denial of selling European bonds.

Positive economic news may lead to diversion of funds into equities. However, all is not well in Europe, which gives the yellow metal a strong support.

Silver

Supported by good performance in stock markets and firm base metals, silver prices ended 0.9% higher at $18.47 an ounce. With industrial demand bouncing back this year from its lows, we reckon the demand for silver will continue to remain strong.

The holdings of

iShares Silver Trust

(SLV) - Get Report

registered an increase of 27.43 tonnes to 9,218.80 metric tonnes from the previous business day.

Aluminum

London Metal Exchange (LME) aluminum contracts for three-month delivery were up 2.5% at $2, 065 a ton Thursday. Aluminum inventories on the LME fell 3,525 tonnes to 4.57 million tonnes, clocking an eight-month low.

As expected, the increase in the metal's price rubbed off on the corresponding stocks as well. Logging in impressive gains were

Alcoa

(AA) - Get Report

, up 5%,

Alumina

(AWC)

, up 12%,

Aluminum Corp of China

(ACH) - Get Report

, up 5.2%,

Kaiser Aluminum

(KALU) - Get Report

, up 4.8%, and

Century Aluminum

(CENX) - Get Report

, up 9.4%.

Moreover, aluminum shipments to Japan rose 28.7% during April. We believe that similar positive data releases will have a positive impact on the metal, which is widely expected to trade higher over the coming week.

Copper

Copper rose in Thursday's trading session taking a cue from the gains in oil and equity markets. LME copper contracts for three-month delivery increased almost 2% to $6, 910 per tonne. Furthermore, copper stockpiles at the LME declined 1,275 tonnes to settle at 477,775 tonnes.

Despite Thursday's increase, we maintain a

bearish stance on the metal

on expectations of excess copper supply in the market, especially as copper imports to China have declined and Shanghai inventories are up 76% since the beginning of the year.

Nickel

LME nickel three-month forwards moved in line with other metals, gaining 3.24% to $21,800 per tonne. The inventory inflow was 138 tonnes to a total of 138,786 tonnes.