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Commodities Precious Metals

Gold and silver daily review (April 29, 2014)

April 29, 2014, Tuesday, 05:23 GMT | 01:23 EST | 09:53 IST | 12:23 SGT
Contributed by Angel Broking


Gold

Strengthening US housing market has once again sent strong signals to the investors that US is on a path of growth trajectory and this led to gold prices decline below $1300 mark on Monday. U.S. data showed contracts to buy previously owned homes rose in March for the first time in nine months.

On the other hand, the United States froze assets and imposed visa bans on seven powerful Russians close to President Vladimir Putin and also sanctioned 17 Russian companies in reprisal for Moscow's actions in Ukraine. Despite heightened geopolitical tensions gold lose its sheen and prices declined.

In contrary to the decline in international gold prices, MCX gold prices gained by 0.2 percent and closed at Rs.28970/10gms.


Silver

Taking cues from weakness in gold prices even spot silver prices declined by 0.3 percent and closed at $19.6/oz. In addition weakness in the base metals pack exerted downside pressure on silver prices. Weakness in the DX however cushioned sharp fall in prices.

On the MCX, silver prices declined by 0.3 percent and closed at Rs.42468/kg.


Outlook

Gold’s decline below $1300 mark signals investors waning interest in the yellow metal despite heightening geo-political tensions between US and Russia as US imposes fresh round of sanctions on Russian assets. Besides, strength in the DX on account of good housing data and a spate of good economic releases from US in recent weeks suggests that gold prices will continue to fall in the coming sessions.

This week, investors will be weighing the conflict in Ukraine against a spate of U.S. economic news, including a Federal Reserve statement Wednesday and U.S. employment data on Friday. For the past few weeks, investors had discounted rising tensions in Ukraine and focused on an improving U.S. economy, helping gold fall more than 6% from its March high.

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