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Commodities Precious Metals

Gold and silver daily review (July 16, 2014)

July 16, 2014, Wednesday, 07:30 GMT | 02:30 EST | 11:00 IST | 13:30 SGT
Contributed by Angel Broking


Gold

Spot gold prices continued its decline for second consecutive session on Tuesday dropping below $1300 mark as bullion investors focused on a U.S. Federal Reserve monetary policy report showing the central bank is set to end its bond-buying stimulus in October. Gold posted its biggest two-day losses since Oct. 1, having lost nearly 3.5 percent between Monday and Tuesday.

Gold prices rose marginally in the US session after Fed Chair Janet Yellen told a Senate committee that U.S. labor markets are far from healthy and signaled the Fed will keep monetary policy loose until hiring and wage data show the effects of the financial crisis are "completely gone.".

Price decline accelerated further below the $1300 mark as the price being the important psychological barrier for technical traders.

On the MCX, gold prices declined by around 0.4 percent taking cues from weakness in international markets and closed at Rs.27648/10gms


Silver

Weakness in gold prices dragged silver prices for the second consecutive session on Tuesday as traders realized that the recent positive run in the metal is not going to last long. In addition, strength in the dollar index and weakness in Nickel prices pushed the grey metal lower.

On the MCX, silver prices declined by around 0.1 percent and closed at Rs.44854/kg


Outlook

On an intraday basis, we expect gold and silver prices to trade on a lower note as the comments from the Fed policy makers indicated that bond buying programmed is going to wind up by October 2014. This means that the optimism and cheer in the US economy is going to stay and will be on a path of growth trajectory. Besides, spot gold price trading below the key $1300 mark is an indication of further weakness in the coming session.

On the MCX, gold and silver prices are expected to trade negative taking cues from weakness in international markets.