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Commodities Precious Metals

Gold and silver daily review (March 31, 2014)

March 31, 2014, Monday, 05:57 GMT | 01:57 EST | 10:27 IST | 12:57 SGT
Contributed by Angel Broking


Gold

Spot gold prices continued its more than 3 percent fall for the second consecutive week as investors sentiment turned bearish after Fed Chair Janet Yellen said the central bank will probably end its massive bond-buying program this year, and could start raising interest rates around six months later.

Recent forecasts of sharply lower gold prices at below $1,200 by Societe Generale and other bullion banks also prompted institutional investors to sell bullion. Decline in SPDR holdings also exacerbated the fall and exerted downside pressure on prices. The metal sank to a one-month low $1285/oz last week, made a high of $1334.36 /oz and closed the week declining 3 percent to close at $1293.5/oz.

In the Indian markets, gold prices fell around 4.5 percent in the last week on account of rupee appreciation by more than 1.5 percent. Gold prices touched a weekly low of Rs.28119/10 gms before closing at Rs.28380/10 gms on Friday.


Silver

Taking cues from weakness in gold prices, even international silver prices declined by around 2.32 percent in the last week. Profit booking at higher levels, and waning interest in the white metal exerted downside pressure on silver prices for the second consecutive week. The white metal touched a weekly low of $19.6/oz and closed the week at $9.78/oz.

In the Indian markets, prices declined by around 4 percent tracking cues from the international markets coupled with rupee appreciation by more than 1.5 percent. Silver prices on the MCX made a weekly low of Rs.42411/kg and closed at Rs.42759/kg.


Outlook

On an intraday basis, we expect precious metals prices to trade sideways. Sharp upside in the prices will be capped as growth in the US economy has raised the prospects of dollar to strengthen in turn exerting downside pressure on prices. Also, prices will be cushioned on strong demand from China and indications that the European Central Bank may support more economic stimulus measures.

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