Commodities » Precious Metals

Gold and silver daily review (February 04, 2010)

Contributed by Nirmal Bang

By Nirmal Bang

MARKET ROUNDUP

Gold futures ended lower on Wednesday, snapping a two-day winning streak, as the market sank on a weak euro against the dollar and amid fiscal worries in euro-zone countries. Silver plunged more than 2% on COMEX mainly due a massive sell off in inudstrial metals.

IN FOCUS

- The world's largest gold-backed exchange- traded fund, SPDR Gold Trust, said its holdings eased 0.14 percent to 1,110.339 tonnes as of Feb. 3, down 1.583 tonnes from the previous business day.

- The world's largest silver-backed exchange- traded fund, the iShares Silver Trust, said its silver holdings stood at 9,355.98 tonnes as of Feb. 3, unchanged from the previous business day.

- Colombia will double its gold production over the next two years as foreign and local miners are drawn to the country by improved security conditions and the prospect of rich deposits, a government official said.

- Highland Gold Mining Ltd plans to boost output by about 25 percent this year after its new management team, installed by billionaire shareholder Roman Abramovich, launches two new fields in eastern Russia. Highland expects to produce between 200,000 and 210,000 gold equivalent ounces from three deposits in 2010, the company said on Wednesday.

- Canadian mid-tier gold miner IAMGOLD Corp plans to lift its gold production to about 1.0 million ounces in 2010 from 939,000 ounces last year after starting operations at a new mine in Burkina Faso, it said on Wednesday.

- Australia's third largest gold miner, Resolute mining, said on Wednesday it would expand gold output by a quarter within the next three years to 500,000 ounces, boosted by its new project in Mali.

- Toronto-listed Etruscan Resources expects to produce 80,000 ounces of gold a year when its new Agbaou mine starts production in 2012, the chief executive said on Wednesday.

FUNDAMENTAL OUTLOOK

Precious metals are trading a tad higher on COMEX on the back of mild weakness in dollar. Gold prices are likley to trade firm in first half of the trading session as the dollar is likely to remain range bound ahead of Initial claims numbers scheduled to release this evening. The dollar may show strength later during the day on the back of expectations of an improvement in Initial claims numbers and which there by pressureise Gold prices. Silver futures may continue to witness a downside during the day in line with the subdued Base metals prices.