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Commodities Precious Metals

Gold and silver daily review (May 07, 2014)

May 7, 2014, Wednesday, 04:24 GMT | 23:24 EST | 08:54 IST | 11:24 SGT
Contributed by Angel Broking


Gold

Gold prices ended lower on Tuesday on reports from the US commerce department that US trade deficit narrowed in March as exports rebounded but the improvement was probably not enough to prevent the government from revising down its estimate of first-quarter growth to show a contraction.

In addition weak physical demand also made investors cautious. Also, Outflows from the world's largest gold-backed exchange-traded fund, the SPDR Gold Trust, totalled nearly 10 tonnes last week. On the other side, the tensions in Ukraine and weakness in the dollar lent support to prices.

On the MCX, gold prices declined by 0.2 percent and closed at Rs.28887/10gms.


Silver

Taking cues from weakness in gold prices even spot silver prices declined by 0.1. Besides, weakness in the base metals complex except Nickel led to decline in prices. However, sharp decline was cushioned on account of weakness in the DX although the US trade balance data showed a narrow trade deficit.

In contrary to the gains in silver prices on the international markets, silver prices on the MCX gained by 1.5 percent and closed at Rs.42571/kg.


Outlook

On an intraday basis gold and silver prices are expected to trade sideways as good data from the US puts pressure on the precious metal prices while tensions in Ukraine lifts bullions safe haven appeal and supports prices.

On the other hand, the physical demand remains weak, with outflows from the gold ETF’s liquidating for continuous five weeks in a row can exert downside pressure on the yellow metal.

On the MCX, gold is expected to trade sideways taking cues from international markets and rupee movements.

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