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Commodities Precious Metals

Gold and silver daily review (April 07, 2014)

April 7, 2014, Monday, 05:13 GMT | 00:13 EST | 08:43 IST | 11:13 SGT
Contributed by Angel Broking


Gold

Last week spot gold prices opened on a negative note traded in the band of $20 and languished near seven week low and closed the week gaining by around half a percent. Weak physical demand from Asia and continued optimism about US economy are the prime reason for gold prices to be under pressure for the continuous three weeks in a row.

Bullion came under pressure after data showed U.S. factory activity rose in March, with production posting its biggest increase since the recession ended. Receding geopolitical tensions and fears the Federal Reserve will raise interest rates next year are also weighing on gold. Decline in SPDR holdings also exacerbated the fall and exerted downside pressure on prices.

In the Indian markets, gold prices gained marginally around 0.30 percent in the last week Gold prices touched a weekly low of Rs.27861/10 gms before closing at Rs.28464/10 gms on Friday.


Silver

Taking cues from marginal gains in gold prices, even international silver prices gained marginally by around 0.61 percent in the last week.

Profit booking at higher levels, and waning interest in the white metal is acting as a negative factor for silver prices. Strength in the dollar index on account of good economic data sets from US is exerting downside pressure on prices. On the other hand, strength in the base metal complex cushioned prices.

In the international markets, the white metal touched a weekly low of $19.64/oz and closed the week at $19.89/oz. In the Indian markets, prices gained marginally by around 0.5 percent tracking cues from the international markets. Silver prices on the MCX made a weekly low of Rs.42528/kg and closed at Rs.42969/kg.


Outlook

On an intraday basis, we expect precious metals pack to trade lower U.S. employers hired at a brisk pace last month and at the same time, the jobless rate held near a five-year low even as Americans poured into the labor market to hunt for work, another upbeat signal of the economy's health. On the MCX we expect precious metals pack to trade lower taking cues from weak international markets and rupee strength.

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