News & Analysis

Gold and silver daily review (March 19, 2010)

Contributed by Nirmal Bang

By Nirmal Bang

MARKET ROUNDUP

Gold futures ended higher on Thursday in spite of a strong dollar, as sovereign debt worries surrounding Greece and uncertainties about currencies prompted safe-haven buying.

IN FOCUS

- The world's largest gold-backed exchangetraded fund, SPDR Gold Trust, said its holdings stood at 1,115.511 tonnes as of March 18, unchanged from the previous business day.

- The world's largest silver-backed exchange- traded fund, the iShares Silver Trust, said its holdings stood at 9351.40 tonnes as of March 18, unchanged from the previous business day.

- Unions at the main mines of Peruvian precious metals company Buenaventura said on Thursday they will go on strike again next week demanding a larger share of profits.

- Russia's gold and foreign exchange reserves rose to $441.3 billion on March 12 from $437.1 billion a week earlier, central bank data showed on Thursday.

- Global gold demand is expected to rise in 2010 after a fall last year with economic recovery driving jewellery demand and fuelling investor appetite for bullion, a senior official at the World Gold Council said.

- WGC SEES INVESTMENT DEMAND FOR GOLD "STRONG ON HISTORICAL LEVELS"- WGC OFFICIAL. WGC HOPES TO SEE C.BANKS ON DEMAND SIDE IN 2010-WGC OFFICIAL. WGC SEES CAUTIOUS RECOVERY IN GOLD JEWELLERY DEMAND IN 2010-WGC OFFICIAL

- The euro stabilized but remained under pressure on Friday on renewed concern about Greece after Athens said it may not be able to achieve its promised deficit cuts if its borrowing costs remain so high.

FUNDAMENTAL OUTLOOK

Gold hardly moved on Friday shrugging off a firmer dollar as worries about Greece's debt problems and volatility in currencies boosted its safe-haven appeal. We expect precious metals to trade sideways to down on the back of further firmness to be witnessed in dollar.