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Commodities Precious Metals

Gold and silver daily review (April 16, 2014)

April 16, 2014, Wednesday, 05:31 GMT | 00:31 EST | 09:01 IST | 11:31 SGT
Contributed by Angel Broking


Gold

Gold prices declined yesterday on bout of technical selling and fears of slackening demand in China. Although there were reports that Chinese firms could have locked up as much as 1,000 tonnes of gold in financing deals, indicating a big a slice of imports has been used to raise funds due to tight credit conditions, rather than to meet consumer demand.

The yellow metal declined in-spite of heightened geopolitical tensions in Ukraine. Gold’s safe haven appeal failed to emerge even after Kiev began an operation against separatist militia in the Russian-speaking east.

On the contrary, SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, said its holdings rose 0.60 tonnes to 806.82 tonnes on Tuesday.

On the MCX, gold prices declined by 1.3 percent taking cues from international markets and rupee weakness and closed at Rs.28573/10gms.


Silver

Taking cues from fall in gold prices even spot silver prices declined on profit booking, strength in the DX and weak performance in the base metals complex on account of weak economic data released from Euro-zone and UK.

On the MCX, silver prices declined taking cues from international markets despite rupee weakness.


Outlook

On an intraday basis, we expect gold and silver prices continue to trade with a negative bias after trading positive for almost a week. Fears of slackening demand in China will continue to pressurize the metal.

Sharp downside in the prices will be cushioned on escalating geo-political tensions between US and Russia and investors renewed interest in the gold ETF’s.

In the Indian markets, gold prices will take cues from international markets although rupee weakness will cushion sharp fall.

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