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Commodities Precious Metals

Gold and silver daily review (July 02, 2014)

July 2, 2014, Wednesday, 09:19 GMT | 05:19 EST | 13:49 IST | 16:19 SGT
Contributed by Angel Broking


Gold

Spot gold continued its momentum and traded at highest point in about 11 weeks as clashes in eastern Ukraine and the Middle East boosted safe haven demand for the precious metal. However prices declined by 0.13 and settled at $1325.4/oz.

In Ukraine, forces deployed aircraft and artillery against pro-Russian separatists in the east, as Fighting has intensified after Ukraine’s President Petro Poroshenko declared an end to a 10-day unilateral cease-fire that had failed to stop the violence in the region. However, the rise in U.S. manufacturing new orders to the highest since December is preventing sharp gains for gold.

Gold prices have also benefited from news that holdings in the largest gold exchange-traded fund, the SPDR Gold Trust saw their largest increase in five weeks on Monday. Holdings rose by 5.68 tonnes to 790.70 tonnes.

On the MCX, gold prices declined by 0.11 percent and closed at Rs.27746/10gms.


Silver

Spot silver prices gained by 0.2 percent in contrast to the decline in bullion prices. Good manufacturing numbers from US as well as China has indicated that industrial activity is gaining momentum in turn supportive for silver prices. In addition, strength in Nickel prices also boosted silver prices

On the MCX, silver prices rose by 0.4 percent and closed at Rs.44298/kg


Outlook

On an intraday basis, we expect gold and silver prices to trade on a positive note on escalation of geo-political crisis in Ukraine. The Ukrainian president has ended a cease fire which has led to the escalation of violence in the region. Besides, the investment flow in the SPDR gold trust also indicates positive sentiment for gold.

On the contrary, good economic indicators from the US in the recent weeks will ensure that any rally in gold fizzles out at higher levels as optimism in the US economy gains momentum.

On the MCX, gold prices are expected to trade on a positive note in line with strength in international markets.

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