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Commodities Precious Metals

Gold and silver daily review (June 30, 2014)

June 30, 2014, Monday, 09:16 GMT | 04:16 EST | 12:46 IST | 15:16 SGT
Contributed by Angel Broking


Gold

At the start of the last week, spot gold prices traded near its two-month high of $1,321.90 on weak US equities and increasing violence in Iraq. The yellow metal climbed as investors switched out of equities after Germany's Ifo index of business sentiment fell more than expected in June. Gold later pared gains on encouraging U.S. new home sales and better consumer confidence data. Bullion prices rose on fears the Iraq conflict could escalate and a perceived lack of commitment by the Federal Reserve to raise interest rates, triggering a heavy bout of short covering.

Another report last Thursday showed the number of Americans seeking unemployment benefits fell again last week. Prices came under pressure on comments from St. Louis Fed President James Bullard that interest rate increases should come sooner rather than later.

In the Indian markets, gold prices rose marginally by around 0.04 percent in the last week. Gold prices touched a weekly high of Rs.27870/10 gms before closing at Rs.27672/10 gms on Friday.


Silver

In the international markets, the white metal rose by 0.77percent, touched a weekly high of $21.18/oz, and closed the week at $21.01/oz. Silver prices rose largely tracking strength in bullion prices as renewed interest by the speculators and weakness in the dollar index acted as a positive factor. Strength in the base metals complex on account of optimism in the US and Chinese economy also pushed the grey metal higher. On the MCX, silver price declined marginally 0.09 percent and closed at Rs.44529/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 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. Gold and silver needs fresh triggers apart from the geo-political tensions and the Iraq crisis to move further. On the MCX, gold and silver prices are expected to trade sideways in line with international markets.