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Commodities Precious Metals

Gold and silver daily review (May 16, 2014)

May 16, 2014, Friday, 05:39 GMT | 00:39 EST | 10:09 IST | 12:39 SGT
Contributed by Angel Broking


Gold

Good economic data released from the US and spot gold prices trading below the $1300 mark led to declined in prices. New applications for U.S. unemployment benefits hit a seven-year low last week while consumer prices in April recorded their largest increase in 10 months.

Holdings in exchange-traded products backed by gold have dropped to the lowest since 2009. Some investors lost faith in the metal as a store of value after the Federal Reserve cut monetary stimulus.

On the MCX, gold prices declined by more than 1 percent and closed at Rs.28408/10 gms.


Silver

Taking cues from weakness in gold prices even spot silver prices declined by around 1.3 percent. Besides, weakness in the base metals complex also exerted downside pressure on prices.

On the MCX, silver prices declined by around 1.5 percent and closed at Rs.41717/kg.


Outlook

On an intraday basis, we expect gold and silver prices to trade on a weak note as the economic data released from the US is painting bright picture about the economy.

Also, holdings in SPDR continue its fall and this can exert downside pressure on prices. Prices trading below the $1300 mark also indicated that technical selling will accelerate further.

On the MCX, gold prices are expected to trade on a weaker note taking cues from international markets.

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