Firm US dollar push prices lower
Bullion metal prices ended moderately lower on Thursday, 09 May 2013. Comex gold futures ended the U.S. day session modestly lower on Thursday, on a corrective pullback from Wednesday's solid gains, some weak economic data from China, and on bearish outside market forces of a firmer U.S. dollar index and weaker crude oil prices.
Gold for June delivery ended lower by $5.1 (0.4%) at $1,468.6 an ounce on the Comex division of the New York Mercantile Exchange on Thursday.
July silver ended lower by $0.02 cents (0.1%) at $23.91 an ounce on Thursday.
China on Thursday reported its producer price index dropped more than expected in April, which suggests slowing production in China. Meantime, China also reported its consumer price inflation rate rose more than expected, up 2.4% versus expectations of a 2.2% rise, on an annual basis which suggests China monetary officials could tighten monetary policy to ward off inflationary price pressures. Thursday's data from the world's largest raw commodity consumer is bearish for that sector, including the precious metals.
In other news, the Bank of Korea unexpectedly cut its interest rates overnight, while the Bank of England left its monetary policy unchanged. The European Central Bank reported Thursday that the Euro zone economy remains weak and could get weaker.
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Latest economic data from US showed that the initial claims level fell from an upwardly revised 327,000 (from 324,000) for the week ending April 27 to 323,000 for the week ending May 4. The consensus expected the initial claims level to increase to 336,000. Today's reading puts claims at their lowest level since January 2008. Typically, a sub-350,000 initial claims level would imply that payrolls would grow by at least 200,000. However, with uncertain demand, it is not guaranteed that firms will add to their workforce.
Also of note, wholesale inventories increased 0.4% in March after declining 0.3% in February. The consensus expected wholesale inventories to increase 0.3%.
In the currency market, the dollar index, which weighs the strength of the dollar against a basket of six other currencies, rose by 0.8% on Thursday.
At the MCX, gold prices for June delivery closed higher by Rs 73 (0.3%) at Rs 27,166 per ten grams. Prices rose to a high of Rs 27,214 per 10 grams and fell to a low of Rs 26,951 per 10 grams during the day's trading.
At the MCX, silver prices for July delivery closed higher by Rs 259 (0.6%) at Rs 45,165/Kg. Prices opened at Rs 45,094/kg and rose to a high of Rs 45,439/Kg during the day's trading.
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