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Commodities Precious Metals

Gold and silver daily review (July 30, 2014)

July 30, 2014, Wednesday, 06:14 GMT | 01:14 EST | 09:44 IST | 12:14 SGT
Contributed by Angel Broking


Gold

Spot gold prices declined on Tuesday as investors nervously awaited the end of U.S. Federal Reserve's two-day policy meeting on Wednesday to see if the central bank will raise interest rates faster than expected. Last Thursday, bullion hit a five-week low below $1,300 an ounce on speculation that U.S. job gains so far this year could accelerate the need for higher interest rates. Fed Chair Janet Yellen said earlier this month the central bank might raise rates sooner than expected if labor growth remained robust.

Traders and investors will also closely scrutinize Wednesday's FOMC statement for any change in the Fed's stimulus rollback. The central bank has typically cut $10 billion from its monthly bond buying program at each recent policy meeting.

On the MCX, gold prices declined by 0.21 percent and closed at Rs.27866/10gms.


Silver

Decline in gold prices led to the fall in silver prices as it declined by around 0.3 percent in yesterday’s session. Strength in the dollar index and weakness in the base metals pack also exerted downside pressure on prices.

On the MCX, silver prices gained by 0.2 percent in contrary to the weakness in international markets and closed at Rs.44269/kg.


Outlook

On an intraday basis, we expect gold and silver prices to trade lower are market expectations that Federal Reserve would further scale back its bond buying programme coupled with weak demand in the physical markets will exert downside pressure.

Meanwhile traders will also keep a close eye on the ongoing geo-political tensions between Russia and the West.

On the MCX, gold and silver prices are expected to trade on a lower note in line with weakness in international markets.