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Commodities Precious Metals

Gold and silver daily review (June 27, 2014)

June 27, 2014, Friday, 06:38 GMT | 01:38 EST | 10:08 IST | 12:38 SGT
Contributed by Angel Broking


Gold

Gold prices declined on Thursday on upbeat jobless claims data and lack of investment interest. Another report on Thursday showed the number of Americans seeking unemployment benefits fell again last week. Gold’s recent gains were majorly driven by a bout of short covering as speculators aggressively bought back their bearish bets.

Prices came under pressure on comments from St. Louis Fed President James Bullard that interest rate increases should come sooner rather than later. Also negative was a drop in crude oil prices as fears eased over export disruption from war-ravaged Iraq.

Physical gold demand in main consumer China remains lackluster, dealers said, with higher prices curbing some buying. China's total gold imports from Hong Kong dropped 17 percent to 67.233 tonnes in May from 80.817 tonnes in April.

On the MCX, gold prices declined by0.3 percent and closed at Rs.27667/10gms.


Silver

Spot silver prices gained in contrast to gains in bullion as speculators renewed interest in the grey metal is sending prices higher. Strength in the base metals pack and flat dollar index further led to the gains.

On the MCX, silver prices declined marginally by 0.04 percent and closed at Rs.44636/kg.


Outlook

On an intraday basis, we expect gold and silver prices to trade sideways as the situation in Iraq seems to have eased down with no fear of oil exports disruptions. Spate of data releases yesterday and in the recent weeks is indicating that optimism in the US economy remain intact although the growth momentum is slow as visible in the GDP data.

In addition, comments from James Bullard regarding rise in the interest rates sooner than later is also an indication of gold prices heading lower in the coming session.

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

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