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Commodities Precious Metals

Gold and silver daily review (May 12, 2014)

May 12, 2014, Monday, 05:36 GMT | 00:36 EST | 09:06 IST | 11:36 SGT
Contributed by Angel Broking


Gold

Spot gold prices started the week on a positive note and rose to three week high on escalating tensions in Ukraine and a break above the key $1300 mark. However, prices traded lower on reports from the US commerce department that US trade deficit narrowed in March as exports rebounded.

Over the course of the week, Russian president Vladimir Putin urged Ukrainian separatists to postpone a referendum and said he was pulling troops back from their common border. The metal also came under pressure after Yellen's comments affirmed a view that the Fed will end its asset purchases this fall as expected.

In the Indian markets, gold prices declined by around 1.2 percent in the last week. Gold prices touched a weekly low of Rs.28452/10 gms before closing at Rs.28525/10 gms on Friday.


Silver

Taking cues from movement in gold prices coupled with the weakness in the base metals pack (except Nickel), 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 2.2 percent, touched a weekly low of $19/oz, high of $19.39/oz and closed the week at $19.1/oz.

In the Indian markets, prices declined by 1.5 percent tracking cues from the international markets. Silver prices on the MCX made a weekly low of Rs.41318/kg, high of Rs.42869/kg and closed at Rs.41453/kg.


Outlook

On an intraday basis we expect gold and silver prices to trade on a negative note on ECB comments to support the Euro zone. On the other hand escalation of geo-political tensions will likely lead to an upside in prices. Meanwhile, there are no major data releases from the US, so any further direction will be a result of movement in dollar index.

On the MCX, gold prices are expected to trade sideways to lower taking cues from international markets.