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Commodities Precious Metals

Gold and silver daily review (May 05, 2014)

May 5, 2014, Monday, 12:35 GMT | 07:35 EST | 16:05 IST | 18:35 SGT
Contributed by Angel Broking


Gold

Spot gold prices started the week on a negative note and fell below the $1300 mark as Strengthening US housing market has once again sent strong signals to the investors that US is on a path of growth trajectory. Price decline continued throughout the week and the fall accelerated further as the Federal Reserve reinforced its view in the U.S. economy's prospects and reduced its monthly bond purchases further by $10billion taking the total asset purchases to $45 billion.

The metal came under pressure after the data from the U.S. showed that consumer spending recorded its largest gain in more than 4-1/2 years in March and factory activity accelerated last month, strengthening views the economy was regaining steam.

In the Indian markets, gold prices gained marginally by around 0.33 percent in the last week and touched a weekly low of $1276.6/oz, high of $1304.4/oz before closing at $1299.82/oz on Friday.


Silver

Taking cues from movement in gold prices coupled with the weakness in the base metals pack, even spot silver prices declined in the last week. Besides, strength in the DX also acted as a negative factor and exerted downside pressure on prices. In the international markets, the white metal declined by 0.5 percent, touched a weekly low of $18.86/oz and closed the week at $19.46/oz.

In the Indian markets, prices declined by 0.91 percent tracking cues from the international markets. Silver prices on the MCX made a weekly low of Rs.40900/kg and closed at Rs.42083/kg.


Outlook

On an intraday basis, we expect gold and silver prices to trade with a positive bias taking cues from the non-manufacturing PMI from the US if the data does not print in as per the market expectations.

Also, the recent housing data released from the US and the industrial activity are showing signs of improvement and consistent trading below the $1300 mark will pressurize gold prices in the coming session.

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