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Commodities Precious Metals

Gold and silver daily review (March 24, 2014)

March 24, 2014, Monday, 05:30 GMT | 01:30 EST | 10:00 IST | 12:30 SGT
Contributed by Angel Broking


Gold

Spot gold prices declined by more than 3 percent last week on comments from the Federal Reserve which stated that the monetary easing will be tightened further by $10 billion taking the total bond purchases to $55 billion. Comments from Janet Yellen, the new chairperson of Federal Reserve, also hinted that federal funds rate will rise in mid 2015 also exerted downside pressure on the yellow metal

In addition, investors concerns over geo-political tensions in Ukraine eased down as Russian President Vladimir Putin signed a treaty last week making Crimea as a part of Russia again and further said that has no plans to seize any other regions of Ukraine. The yellow metal touched a weekly low of $1320.24/oz and closed at $1333.94/oz in the last trading session of the week.

In the Indian markets, gold prices fell around 3 percent in the last week and touched a weekly low of Rs.29696/10 gms before closing at Rs.30595/10 gms on Friday.


Silver

Taking cues from negative movement in gold prices, spot silver prices declined by around 6 percent in the last week. Weakness in silver prices was in coherence with the weakness in the base metals pack. The white metal touched a weekly low of $20.1/oz and closed at $20.6/oz in the last trading session of the week.

On the domestic front, prices plunged more than 5 percent in the last week and closed at Rs.44651/kg on Friday after touching a weekly low of Rs.44600/kg.


Outlook

Gold prices will trade positive on intraday basis on escalating geo-political tensions between Russia, EU and the US. In addition, investors increasing appeal for safe haven, bargain buying on account of last week’s more than 3 percent fall in prices will support the prices in the near term. Meanwhile, CFTC positioning indicates that money managers raised their bullish bets in gold futures and options to the highest level since December 2012 supporting prices.