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Commodities Precious Metals

Gold and silver daily review (May 15, 2014)

May 15, 2014, Thursday, 05:49 GMT | 00:49 EST | 09:19 IST | 11:49 SGT
Contributed by Angel Broking


Gold

Gold prices rose on Wednesday as US bond yields hit a one year low on reports that the ECB is going to do the rate cut next month is more or less a done deal. Besides, fall in equities and dollar weakness also acted as a positive factor.

On the economic data front, U.S. wholesale prices increased 0.6 percent in April, the most in 1-1/2 years, a sign inflation pressures may be creeping up. Also, U.S. producer prices posted their largest increase in 1-1/2 years in April. Good economic data from the US can however exert downside pressure on prices.

On the MCX, gold prices rose by 0.85 percent and closed at Rs.28704/10gms.


Silver

Taking cues from strength in gold prices, even spot silver rose in yesterday’s trading session. Silver, in the spotlight after news the 117-year old London "fix", used as the global price benchmark, will stop in August, rose to a one-month high of $19.97 an ounce.

On the MCX, silver prices rose by 1.1 percent and closed at Rs.42348/kg.


Outlook

On an intraday basis, we expect gold and silver to trade with a positive bias on hopes that ECB action on rate cut is more or less a done deal. This will result in strength in dollar and weakness in the commodities pack including gold and silver.

On the other hand, the economic data sets from US clearly suggest that the country is in a bright spot and this can exert downside pressure on prices.

On the MCX, gold and silver prices are expected to trade with a positive bias taking cues from international markets.