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Commodities Precious Metals

Gold and silver daily review (June 05, 2014)

June 5, 2014, Thursday, 06:15 GMT | 01:15 EST | 09:45 IST | 12:15 SGT
Contributed by Angel Broking


Gold

Gold prices declined on Wednesday on anticipation that ECB will possibly do the rate cut in Thursday’s policy meeting coupled with uncertainties over the key nonfarm payrolls data due to be released this week.

The ECB is widely expected to cut interest rates, including lowering the rate banks are charged for depositing funds with the central bank to below zero, at Thursday's policy meeting. On Friday, the United States will release its all-important monthly non-farm payrolls for May. A Reuters survey of economists forecast that U.S. employers probably added 218,000 new payrolls last month, a step down from April's robust 288,000 job gain, but still above average for the preceding six months.

Holdings in the SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, rose 1.8 tonnes to 787.08 tonnes on Tuesday, reflecting slightly higher investor interest in bullion; however, the total holdings were still near five year lows.

On the MCX, gold prices declined by 0.36 percent and closed at Rs.26639/10gms.


Silver

Spot silver prices largely traded sideways in yesterday’s trading session as investors remain on sidelines with regards to the uncertain economic events from Euro-zone as well as from the US. Spot silver prices remain unchanged at $18.76/oz.

On the MCX, silver prices gained marginally by 0.1 percent and closed at Rs.39827/kg.


Outlook

On an intraday basis, we expect gold and silver prices to trade on a lower note on an anticipation that ECB will act in this policy meeting by doing a rate cut while the most awaited nonfarm payrolls data in the US will provide clues about the labor market which will give Fed more room to wind down its monetary easing programme. Although, the holdings in SPDR rose on Tuesday, the overall holdings still hover around fiver year lows indicating slow demand on the investment side.

On the MCX, gold and silver prices are expected to trade lower taking weak cues from international markets.