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Commodities Precious Metals

Gold and silver daily review (April 02, 2014)

April 2, 2014, Wednesday, 05:41 GMT | 00:41 EST | 09:11 IST | 11:41 SGT
Contributed by Angel Broking


Gold

Spot gold prices continued its fall for a fifth session and declined by 0.4 percent on Tuesday on account of firm manufacturing data from US and rising equities. Bullion came under pressure after data showed U.S. factory activity rose in March, with production posting its biggest increase since the recession ended in the latest indication the economy was regaining its footing after a brutal winter. In addition, easing geo-political tensions and fears that Federal Reserve will raise interest rates next year are weighing on gold prices.

Also, the fall in SPDR holdings trust is further exerting downside pressure on gold prices. SPDR Gold Trust GLD, the world's largest gold-backed exchange-traded fund, said its holdings fell 0.26 percent to 810.98 tonnes on Tuesday from 813.08 tonnes on Monday.

On the MCX, gold prices declined by 1.6 percent on expectations that rupee will strengthen in the coming sessions and closed at Rs.28080/10gms.


Silver

Tracking weak cues from fall in gold prices, even spot silver prices declined by 0.1 percent, although the base metals pack traded largely positive in yesterday’s session. Good data from US lifted dollar in turn reducing the white metal prices.

In the Indian markets, prices silver prices declined by 0.5 percent taking cues from international markets and closed at Rs.42588 /kg.


Outlook

From an intraday perspective, we expect gold and silver prices to continue its downward trend as strong manufacturing data from US has raised the prospects of the economy in turn reducing appeal for the safe haven. Also, rising US equities will further exert downside pressure in prices. In addition, easing of geo-political tensions and fall in the SPDR holdings further will act as a negative factor.

On the MCX, we expect prices to trade lower tracking cues from international markets and rupee appreciation.

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