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Commodities Precious Metals

Gold and silver daily review (May 22, 2014)

May 22, 2014, Thursday, 07:25 GMT | 02:25 EST | 10:55 IST | 13:25 SGT
Contributed by Angel Broking


Gold

Spot gold prices declined in yesterday’s trading session on strength in the dollar index and rise in equities as the minutes of the Federal Reserve released showed that the central bank has begun the framework for an eventual winding up of stimulus although no final decisions were taken.

Minutes of the session released on Wednesday said Fed staff presented several approaches to raising short-term interest rates, but said the discussion was simply "prudent planning" and not a sign rate hikes would come any time soon. Inflation expectations were also tamed as a number of officials argued there was likely more slack in the labor market than suggested by the nation's 6.3 percent jobless rate, with sluggish wage gains cited as supporting evidence.

On the MCX, gold prices declined by more than 2.5 percent taking cues from weakness in international markets and closed at Rs.27373/10gms.


Silver

Taking cues from weakness in gold prices spot silver prices traded largely in a negative territory as the minutes of the Federal Reserve clearly stated that the winding up of stimulus is likely to be a done deal. However at the closing prices gained marginally by 0.1 percent and closed at $19.4/oz

On the MCX, silver prices declined by 0.3 percent and closed at Rs.40896/kg


Outlook

On an intraday basis we expect gold and silver prices to trade sideways to weaker as Fed has reinstated its confidence in the US economy as is clearly understood by the minutes released last night that Fed has begun the framework for winding up of monetary stimulus taking in to consideration the improved economic scenario. Besides, decline in the SPDR gold trust at its lowest point since 2008 also indicates waning interest in the yellow metal.

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