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Commodities Precious Metals

Gold and silver daily review (May 21, 2014)

May 21, 2014, Wednesday, 06:17 GMT | 01:17 EST | 09:47 IST | 12:17 SGT
Contributed by Angel Broking


Gold

Spot gold prices fell in the European session yesterday as dollar index rose by 0.1 percent coupled with an industry report from the world gold council said that demand from major consumers China and India fell in the first quarter. However the session ended with gold gaining by around 0.17 percent.

The World Gold Council said on Tuesday consumer gold demand in the world’s biggest buyer China fell 18 percent to 263.2 tonnes, with Chinese demand for gold coins and bars down 55 percent in the first quarter, offset only partially by a 10 percent rise in jewellery off take. Indian consumer demand was down by just over a quarter to 190.3 tonnes, although a drop in sales from bullion-backed investment funds kept overall demand steady.

On the MCX gold prices rose by 0.15 percent taking cues from international markets and closed at Rs.28186/10gms.


Silver

Taking cues from gains in gold prices even spot silver prices rose marginally by 0.2 percent. Strength in the dollar index coupled with weakness in the base metals pack however capped sharp gains in prices.

On the MCX, silver prices rose marginally by 0.4 percent taking cues from international markets and closed at Rs.41030/kg.


Outlook

On an intraday basis, we expect bullion prices to trade lower on the back of strength in the DX coupled with the decline in demand from major consumers like China and India will exert downside pressure.

Meanwhile, gold holding from SPDR gold trust continue liquidation acting as a negative factor. In addition, the economic data from the US is hinting towards brighter prospects of the economy pressurizing gold prices. Movements in the dollar index, rising equities and low treasury yields are all indications of gold prices heading lower in the coming session. Also, lackluster investment demand coupled with soft physical demand will also exert downside pressure.

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

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