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Commodities Precious Metals

Gold and silver daily review (June 16, 2014)

June 16, 2014, Monday, 05:19 GMT | 00:19 EST | 09:49 IST | 12:19 SGT
Contributed by Angel Broking


Gold

Last week, gold held above its lowest level in four months on expectation that its price declines after a rally in the equity markets might spur purchases. In addition, escalating violence in Iraq has led to situation of civil war appealing bullions safe haven appeal. Iraq’s ruling government is calling on the U.S. for military aid, although such is not likely. The fear now is that violence in Iraq could spread to other Arab countries which will be supportive for gold prices.

On the flip side, In a speech last Monday by St Louis Federal Reserve President, James Bullard said that there is an evidence of inflation moving higher, indicating that monetary policy winding will be done as soon as possible which in turn will lead to correction in gold prices. In the International markets, gold prices gained by around 2 percent in the last week. Gold prices touched a weekly high of $1277.70/oz before closing at $1276.5/oz on Friday.

In the Indian markets, gold prices rose by around 3 percent in the last week taking cues from strong international markets. Gold prices touched a weekly high of Rs.26660/10 gms before closing at Rs.26627/10 gms on Friday.


Silver

Spot silver prices largely traded positive in the last week as renewed interest in silver by speculators and short covering being the prime reason behind the rally. Although the entire base metal complex traded lower, silver prices largely tracked movement in gold prices as bargain hunters pinched in. In the international markets, the white metal rose by 3.43 percent, touched a weekly high of $19.71/oz, and closed the week at $19.62/oz. On the MCX, silver prices rose by 4.70 percent and closed at Rs.41875/kg in line with strength in international markets. Silver prices made a weekly high of Rs.41900/kg.


Outlook

On an intraday basis, we expect gold and silver prices to trade on a positive note on escalation of violence in Iraq which will be a supportive factor for gold prices. Besides, weakness in the dollar will also act as a positive factor. Renewed interest by the investors in SPDR gold trust will also aid the rise in gold prices in the coming sessions.

On the MCX, gold and silver prices are expected to trade on a positive note taking strong cues from international markets.

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