Bullion metal prices ended substantially lower on Wednesday, 26 June 2013 at Comex. Gold and silver prices plummeted to nearly three-year lows as both markets saw weak-handed long liquidation and dollar rose. As the second quarter winds down, Comex gold and silver futures prices are set to see their poorest quarterly price performances ever recorded, on a percentage basis.
Gold for August delivery ended lower by $45.3 (3.6%) at $1,229.8 an ounce on the Comex division of the New York Mercantile Exchange on Wednesday.
July silver ended lower by $0.94 (4.8%) at $18.59 an ounce on Wednesday.
Several factors are working against the precious metals markets and the raw commodity sector, in general. A strong batch of U.S. economic data on Tuesday further bolstered notions the Fed will begin to wean the U.S. economy from its easy-money policies, which for several years have been a bullish underlying factor for the raw commodity sector, including the precious metals. Last week's hawkish Federal Reserve FOMC meeting is still reverberating in the market place.
European Central Bank President Mario Draghi said Wednesday the ECB will keep its monetary policy accommodative for the near future. Draghi's statement echoed other major central bank officials who earlier this week made more dovish remarks. There is some speculation in the market place that Fed Chairman Ben Bernanke believes the market place misinterpreted the results of last week's FOMC meeting as too hawkish.
Goldman Sachs cut its outlook on gold prices by more than 9% to $1,300 an ounce for the end of this year, and by more than 17% to $1,050 an ounce for the end of 2014. Later in the day, HSBC followed suit, trimming its estimates for average gold prices through 2015. HSBC lowered its average 2013 price by about 9% to $1,396 an ounce, while setting the 2014 price at $1,435 an ounce, and the 2015 price at $1,395 an ounce.
UBS cut its outlook on silver prices earlier during the week. The bank slashed its one-month silver forecast 32.7% to $17.50 a troy ounce and cut its three-month silver forecast 26.8% to $20.50 an ounce.
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The U.S. dollar index, which weighs the strength of the dollar against a basket of six other currencies, rose by 0.7% on Wednesday.
Among latest economic data expected at Wall Street, it indicated first quarter GDP growth was revised down with the third estimate to 1.8% from 2.4%. Most of the downward revision came from consumption in services. In the previous estimate, services spending increased 3.1%. That was revised down to 1.7% growth and contributed 0.6 percentage points less to GDP growth.
At the MCX, gold prices for August delivery closed lower by Rs 418 (1.6%) at Rs 26,277 per ten grams. Prices rose to a high of Rs 26,650 per 10 grams and fell to a low of Rs 25,900 per 10 grams during the day's trading.
At the MCX, silver prices for July delivery closed lower by Rs 1,095 (2.7%) at Rs 39,568/Kg. Prices opened at Rs 40,542/kg and fell to a low of Rs 38,825/Kg during the day's trading.
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