Commodities » Precious Metals

Gold and silver daily review (March 18, 2010)

Contributed by Nirmal Bang

By Nirmal Bang

MARKET ROUNDUP

Gold futures ended slightly higher on Wednesday,erasing initial gains, as a flat dollar and largerthan- expected decline in producer prices failed to give the market a firm direction.

IN FOCUS

- The world's largest gold-backed exchangetraded fund, SPDR Gold Trust, said its holdings stood at 1,115.511 tonnes as of March 17, unchanged from the previous business day.

- The world's largest silver-backed exchange- traded fund, the iShares Silver Trust, said its holdings stood at 9351.40 tonnes as of March 17, unchanged from the previous business day.

- The amount that gold miners cut their hedging positions rose to 4 million ounces in the fourth quarter from 3.18 million ounces in the third quarter as Barrick Gold Corp closed out its entire hedgebook.

- Noncommercial net long U.S. gold futures positions inched up 0.4 percent to 208,194 contracts in the week ended March 9 from 207,372 contracts a week earlier, according to the weekly Commitments of Traders report published by the Commodity Futures Trading Commission. It was the highest in five weeks.

- The dollar firmed on Thursday, recovering some of its losses against higher-yielding currencies made the previous day, as investors trimmed short dollar positions ahead of U.S. consumer inflation readings for February.

- Canadian gold miner New Gold said full operations will resume at its Cerro San Pedro mine in Mexico after a federal district court lifted restrictions on the use of explosives at the mine.

- African Barrick Gold (ABG) will resume operations at its Bulyanhulu mine in Tanzania on Friday following a fatal accident that halted all mining three days earlier, the company said in a statement.

FUNDAMENTAL OUTLOOK

Gold slipped on Thursday as the U.S. dollar strengthened against other currencies, while there were concerns that a failure to sustain recent highs could prompt some investors to shift their money to stocks or bonds. We expect gold to trade weak for the day backed by some firmness is expected in dollar. In the evening session we have intial claims and CPI data to be released by the US, expectation for the same is good which is likely to futher trigger upside in dollar thus pressurizing precious metals.