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Commodities Precious Metals

Gold and silver daily review (June 17, 2014)

June 17, 2014, Tuesday, 06:28 GMT | 01:28 EST | 09:58 IST | 12:28 SGT
Contributed by Angel Broking


Gold

The yellow metal had gained nearly 4 percent in the past seven sessions on the rising violence in Iraq and lingering tensions over Ukraine. After trading near three weeks high on turmoil in Iraq which lifted bullions safe haven appeal, gold prices fell on Monday due to profit booking at higher levels. In addition, the fall in prices can be attributed to key technical level of $1285 wherein most of the options trades are placed.

Bullion prices rose initially after the United States said it could launch air strikes to support the Iraqi government after a rampage by Sunni Islamist insurgents. Gold's initial gains were also boosted by developments in Ukraine, where pro-Russian separatists shot down a Ukrainian army transport plane.


Silver

Weakness in gold prices on account of profit booking also led to fall in silver prices in the international markets. Although base metals complex traded largely positive and dollar index weakness it did not support the prices.

On the MCX, silver prices rose by 0.8 percent on account of depreciation in rupee and closed at Rs.42204/kg.


Outlook

On an intraday basis, spot gold prices are expected to trade sideways as profit booking at higher levels will lead to correction in prices whereas escalation of violence in Iraq and geo-political tensions in Ukraine will support prices.

Meanwhile, investors will watch out for Wednesday's Federal Reserve policy meeting that could bring caution to any rally in gold as markets watch for any signals on when the U.S. central bank might begin raising interest rates.

On the MCX, gold and silver prices are expected to trade sideways in line with international markets.