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Commodities Precious Metals

Gold and silver daily review (May 29, 2014)

May 29, 2014, Thursday, 04:42 GMT | 23:42 EST | 09:12 IST | 11:42 SGT
Contributed by Angel Broking


Gold

Gold prices continued its fall and traded near 4 months low on Wednesday on rally in US equities which stands at record highs and dollar strength against the Euro. On the other hand the tensions between Ukraine and Russia seem to have eased a bit reducing bullions safe have appeal.

Investors also cited a breakdown of gold's usual inverse correlation with U.S. bond yields. Yields on 10-year U.S. Treasuries tumbled to their lowest in 11 months touching below the 2.46 percent.

On the MCX, gold prices declined by around half a percent in line with the fall in the international markets and closed at Rs.26834/10gms.


Silver

Weakness in gold prices lead to the fall in silver prices in the international markets. Strength in the dollar index, ease of geo-political tensions and weakness in Nickel prices further exerted downside pressure.

On the MCX, silver prices declined by around 0.4 percent and closed at Rs.40202/kg.


Outlook

On an intraday basis, we expect gold and silver prices to trade with a negative bias as rally in the US equities being the prime reason for decline in bullions safe haven appeal. This coupled with optimism in the US economy and continues outflows from the SPDR gold trust will exert downside pressure on prices.

On the MCX, gold and silver prices are expected to trade lower in line with international markets, however rupee weakness will cushion sharp fall in prices.

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