Strong dollar pushes prices lower
Bullion metal prices ended lower on Monday, 08 April 2013. Prices traded lower due to a strong US dollar. The market saw chart consolidation following last Friday's gains. A light slate of U.S. economic data Monday failed to significantly move the gold and silver markets' prices. Traders and investors are looking for fresh fundamental inputs to drive these markets.
Gold for June delivery ended lower by $3.4 or 0.2% at $1,572.5 an ounce on the Comex division of the New York Mercantile Exchange on Monday.
May silver ended lower by 8 cents (0.3%) at $27.14 an ounce on Monday.
The market place has recently received a shot of confidence the easy money policies of the major central banks of the world will remain in place for quite some time to come, and that is a bullish underlying factor for hard assets like gold and silver. The weaker-than-expected U.S. jobs report last Friday, the fresh Bank of Japan's monetary stimulus announcement last week, and the still-very-weak European Union economic and financial situation all argue for the Federal Reserve, the Bank of Japan and the European Central Bank to keep their feet on the easy money accelerator.
North Korea and its nuclear threats toward the U.S. and South Korea continue to attract some attention of the market place.
The U.S. dollar index, which weighs the strength of the dollar against a basket of six other currencies, rose by 0.3% on Monday.
Latest job data showed that the United States created the fewest number of jobs in March in nine months, adding to a string of reports suggesting companies have cut back on new hires and that the economy is slowing again. As per the report, the U.S. added a seasonally adjusted 88,000 jobs, the smallest increase since last June and nearly half-a-million people stopped looking for work last month. The March jobs report fell well below Wall Street expectations. Market had forecast a 190,000 increase in jobs. U.S. stocks slumped after the report.
The unemployment rate fell to 7.6% from 7.7% to mark the lowest level since December 2007, but the decline stemmed from more Americans dropping out of the labor force.
The disappointing March jobs report has revived concerns that the economy could cool off again in midyear like it did in both 2012 and 2011. In both years, hiring started out strong but later petered out. Most economists have been predicting the economy would slow in the second quarter after a strong start to the New Year. Growth in the second quarter is forecast to decelerate to 2.2% from an estimated 3% in the first three months of 2013.
At the MCX, gold prices for June delivery closed lower by Rs 227 (0.8%) at Rs 29,540 per ten grams. Prices rose to a high of Rs 29,751 per 10 grams and fell to a low of Rs 29,463 per 10 grams during the day's trading.
At the MCX, silver prices for May delivery closed lower by Rs 372 (0.72%) at Rs 51,198/Kg. Prices opened at Rs 51,520/kg and fell to a low of Rs 51,070/Kg during the day's trading.
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