Bullion metal prices ended lower on Tuesday, 28 May 2013. A strong rise in the US dollar and overall strength in the global and US equities pushed prices of precious metals lower. The greenback and U.S. stock indexes were supported by stronger U.S. economic data on Tuesday that included a five-year high in the consumer confidence index.
Gold for August delivery ended lower by $7.8 (0.6%) at $1,379.7 an ounce on the Comex division of the New York Mercantile Exchange on Tuesday. It touched a high of $1,400 and a low of $1372.5 during intra day trading.
July silver ended lower by $0.30 cents (1.4%) at $22.19 an ounce on Tuesday.
Following last week's news events from the U.S. Federal Reserve Chairman Bernanke's speech to Congress and the latest FOMC minutes' release traders and investors will examine this week's U.S. economic data with a keener sense of whether the economy continues to grow slowly, or is beginning to fade. Tuesday's data favored the hawkish Fed camp that wants to wind down quantitative easing of U.S. monetary policy.
J.P. Morgan analysts cut the forecast of silver price for the second quarter by 17% to $25 an ounce and lowered the full-year outlook on silver to $27.89 from $30.01. Bank of America Merrill Lynch cut its 2013 forecast on gold by 12% to $1,478 an ounce.
In the currency market, the dollar index, which weighs the strength of the dollar against a basket of six other currencies, rose by 0.6%.
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Regarding economic data expected at Wall Street on Tuesday, the Conference Board's Consumer Confidence report for May brought encouraging news with the index rising to 76.2 from 68.1 in April. The consensus expected a reading of 72.5. The May number was the highest since February 2008. The uptick in confidence fits with the improvement in labor market conditions and fits neatly with the ongoing strength in the stock market and housing market that have produced their share of positive-sounding headlines.
Separately, the March Case-Shiller 20-city Home Price Index rose 10.9% while a 10.1% increase had been expected by the consensus. This follows the previous month's increase of 9.3%.
At the MCX, gold prices for June delivery closed lower by Rs 35 (0.13%) at Rs 26,411 per ten grams. Prices rose to a high of Rs 26,826 per 10 grams and fell to a low of Rs 26,202 per 10 grams during the day's trading.
At the MCX, silver prices for July delivery closed lower by Rs 348 (0.8%) at Rs 43,262/Kg. Prices opened at Rs 43,550/kg and fell to a low of Rs 42,960/Kg during the day's trading.
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