Bullion metal prices ended higher on Tuesday, 09 April 2013. Prices traded higher due to a weak US dollar. Prices were boosted on bargain hunting following recent losses that last week pushed prices to a 10-month low.
Gold for June delivery ended higher by $14.2 or 0.9% at $1,586.7 an ounce on the Comex division of the New York Mercantile Exchange on Tuesday.
May silver ended higher by 74 cents (2.7%) at $27.88 an ounce on Tuesday.
The next significant news development for the precious metals markets is likely to be Wednesday's release of the minutes from the last meeting of the U.S. Federal Reserves Open Market Committee (FOMC).
In overnight news, it was reported that China's consumer price inflation came in lower than expected, at a 2.1% annual rate in March versus expectations of a 2.4% rise. This is a bullish underlying factor for the raw commodity sector. China is the world's largest consumer of many raw commodities.
The yen hit multi-year lows versus the U.S. dollar and Euro currencies overnight. There is also talk the European Central Bank could soon lower its interest rates, in the race to devalue. Weak U.S. jobs data last week suggests the U.S. Federal Reserve will not be easing its monetary policy any time soon. The devaluation of the major currencies is also a bullish underlying factor for hard assets in the investment world, including gold and silver.
In the currency market, the dollar index, which weighs the strength of the dollar against a basket of six other currencies, fell by 0.5%.
At Wall Street, today's economic data was limited to wholesale inventories. Inventories declined 0.3% in February after increasing a downward revised 0.8% (from 1.2%) in January. The consensus expected wholesale inventories to increase 0.5%.
The drop in inventories was likely the result of better-than-expected sales growth. Wholesale sales jumped 1.7% in February after falling 0.8% in January. Wholesalers may not have been in position to maintain normal inventories levels given the size of the sales gain.
At the MCX, gold prices for June delivery closed higher by Rs 107 (0.4%) at Rs 29,647 per ten grams. Prices rose to a high of Rs 29,725 per 10 grams and fell to a low of Rs 29,430 per 10 grams during the day's trading.
At the MCX, silver prices for May delivery closed higher by Rs 965 (1.9%) at Rs 52,163/Kg. Prices opened at Rs 51,201/kg and rose to a high of Rs 52,447/Kg during the day's trading.
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