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Commodities Precious Metals

Gold and silver daily review (March 21, 2014)

March 21, 2014, Friday, 05:48 GMT | 01:48 EST | 10:18 IST | 12:48 SGT
Contributed by Angel Broking


Gold

Gold has fallen 4 percent since the start of the week, as investors fret less about Ukraine and shifted the focus to timing of the interest rates in US. Spot gold prices declined by 0.2 percent yesterday, on falling demand from the world's largest gold consumer, China. That means that investors are dumping the precious metal. Besides, strength in the DX also exerted downside pressure on the yellow metal.

In the Indian markets, gold prices declined by 0.8 percent touching an intra-day high of Rs.29973/10 gms and closed at Rs.29751/10 gms on Thursday.


Silver

Taking cues from fall in gold prices even spot silver prices declined by 1.6 investors chose to take profits after comments from the Federal Reserve to taper its bond buying program and signal rise in the interest rates in mid 2015 pushed the metal lower. Strength in the DX also acted as a negative factor. The white metal touched an intra-day low of $20.48/oz and closed at $20.40/oz in yesterday’s trade.

Silver prices on the MCX declined by 1.5 percent yesterday and closed at Rs.44992/kg after touching an intra-day low of Rs.44720/kg.


Outlook

Gold has lost nearly 4 percent in the last three sessions, partly due to profit-taking after its rally on tensions over Ukraine. This fall will continue in today’s session as investors start pricing in the interest rate hike in US as per the comments from the Janet Yellen. The U.S. central bank also proceeded with its reductions to its massive bond-buying stimulus, announcing it would cut its monthly purchases of U.S. Treasuries and mortgage-backed securities to $55 billion from $65 billion. A stronger dollar will also weigh on gold, with the dollar index jumping 0.3 percent yesterday. We expect gold to trade on weak note in today’s session. In the Indian markets rupee strength will exacerbate the fall in gold prices.