Bullion metal prices ended mixed on Tuesday, 19 March 2013. Gold prices climbed up for fourth straight session while silver ended lower. Uncertainty at Cyprus helped yellow metal prices move up. Gold prices ended the U.S. day session with moderate gains and hit a fresh three-week high on Tuesday. More safe-haven demand was featured amid the present uncertainty regarding Cyprus' financial bailout situation.
Gold for April delivery ended higher by $6.7 or 0.4% at $1,611.3 an ounce on the Comex division of the New York Mercantile Exchange on Tuesday.
March silver ended lower by 3 cents (0.1%) at $28.84 an ounce on Tuesday.
Markets were still jittery on Tuesday afternoon as reports and rumors swirled regarding the Cyprus bailout and Cyprus parliamentary voting on the matter, and possible further aid from the International Monetary Fund. There were reports the Cyprus parliament did reject the controversial EU/IMF bailout package unveiled over the weekend that included taxing savings accounts in domestic banks. Cyprus banks remain closed this week as the bailout measure is considered.
In other overnight news, the German ZEW economic expectations index rose in March to its highest level in three years. However, the report also warned of the uncertainty regarding the EU/IMF bailout of Cyprus and the recent Italian election uncertainty could harm the German economic recovery in the coming weeks and months. Also Tuesday, Euro zone construction output fell sharply in January, to its lowest level since 1997. That report hints the Euro zone economy continues in overall recession.
Attention of the market place is also turning to the Federal Open Market Committee monetary policy meeting of the U.S. Federal Reserve, which starts Tuesday and ends Wednesday. Fed Chairman Ben Bernanke will hold a press conference following the meeting's conclusion on Wednesday afternoon.
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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 0.29% on Tuesday.
HSBC on Monday kept their bullish view on gold but still cut their price forecasts on the metal for this year and next. They said they expect prices to be supported by ongoing accommodative monetary policies, with geopolitical tensions and escalating 'currency wars' likely to provide an additional lift. But they reduced their gold-price forecasts in light of the weak prices seen earlier this year. HSBC lowered its 2013 average gold-price forecast to $1,700 from $1,760 and the 2014 forecast to $1,720 from $1,775.
Among economic data expected at Wall Street on Tuesday, in February, housing starts increased 0.8% in February to 917,000 after falling 7.3% to 910,000 in January. The market had expected housing starts to increase to 911,000.
At the MCX, gold prices for April delivery closed higher by Rs 324 (1.1%) at Rs 29,871 per ten grams. Prices rose to a high of Rs 29,889 per 10 grams and fell to a low of Rs 29,481 per 10 grams during the day's trading.
At the MCX, silver prices for May delivery closed higher by Rs 386 (0.7%) at Rs 54,707/Kg. Prices opened at Rs 54,297/kg and rose to a high of Rs 54,810/Kg during the day's trading.
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