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Commodities Precious Metals

Gold and silver daily review (April 11, 2014)

April 11, 2014, Friday, 05:42 GMT | 00:42 EST | 10:12 IST | 12:42 SGT
Contributed by Angel Broking


Gold

Gold prices rallied yesterday boosted by sharp pull back in US equities and follow through buying after the minutes of the Federal Reserve stated its cautious approach in future interest rate hikes. Data from US unemployment claims tumbled last week to the lowest level in nearly seven years; however the yellow metal ignored the data which signaled a strong job market.

On the other hand, prices in top buyer China slipped back to a discount of about $2 an ounce on London prices on Thursday from a premium in the previous session. Also reflecting weak physical demand, gold stocks sitting in U.S. exchange warehouses are at a 10-month high. Further, decline in LME inventories by 0.26 percent to 806.22 tonnes acted as a negative factor.

In the Indian markets, gold prices gained by 1.3 percent following cues from international markets and rupee depreciation.


Silver

Taking cues from strong movement in gold prices even silver prices gained as investor’s interest in the white metal is changing moods in accordance with the macro data coming from US and monetary policy decisions on the other hand. Besides weakness in the DX also acted as a positive factor and lifted prices.

In addition strong performance in the base metals complex also acted as a positive factor for prices.

On the MCX, silver prices gained by around 2 percent taking cues from strong international markets and rupee weakness.


Outlook

On an intraday basis we expect prices to trade on a positive note as fears of early hike in the interest rates in the US has subsided. However, physical demand, the most important element of precious metals market seem to be weak as gold stocks in the US exchange warehoused are at 10 month high.

On the MCX, we expect gold and silver prices to trade stronger taking cues from international markets and rupee weakness.

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