Bullion metal prices ended flat on Wednesday, 06 March 2013. Prices were steady despite a higher dollar. Investors weighed the metal's safe-haven appeal against a backdrop of U.S. economic releases, ahead of upcoming monetary policy decisions by central banks in Europe.
Gold for April delivery ended unchanged at $1,574.9 an ounce on the Comex division of the New York Mercantile Exchange on Wednesday. It traded between $1,566 and $1,584 earlier during the day.
March silver ended higher by 20 cents (0.7%) at $28.81 an ounce on Wednesday.
The market received a healthy dose of economic data today. In addition, the Federal Reserve released its March Beige Book. In the summary of economic activity from the 12 districts, most described growth as "modest to moderate". Service demand was described as generally positive while automobile sales were characterized as strong in most districts. Similarly, a number of regions saw an increase in tourism. With regards to prices, modest pressure was reported with certain raw materials seeing a rise in prices.
Arguably the most important U.S. economic report of the month, the employment situation report for February, is due out Friday morning. The key non-farm payroll number is expected to come in at up 157,000, while the unemployment rate is forecast at 7.8%. The European Central Bank also holds its monthly meeting and press conference on Thursday. While the ECB is expected to announce no major changes to its monetary policy, traders will closely scrutinize ECB chief Mario Draghi's remarks at his press conference following the meeting.
A German five-year bond auction on Wednesday produced the lowest yields so far this year, which shows European investors are still wary regarding a flare-up in the EU sovereign debt crisis following the recent Italian elections that produced no clear victor. Fresh EU economic data released overnight showed EU exports dropped by 0.9% in the fourth quarter, compared to the third quarter. That's the fastest quarterly drop in almost four years.
Reports overnight said South Korea's central bank added around 20 metric tons of gold to its official reserves in February. That's around a 25% increase in holdings by South Korea, as the country's central bank does some value-buying.
The dollar index, which weighs the strength of the dollar against a basket of six other currencies rose by 0.4% on Wednesday.
Today's economic data showed that factory orders declined 2.0% in January after increasing a downwardly revised 1.3% (from 1.8%) in December. The consensus expected the reading to indicate a decline of 2.2%. As the advance durable goods report already showed, the decline in orders was a result of weaker aircraft demand with those orders falling 45.7% in January.
Also, according to today's ADP Employment Change report, the private sector added 198,000 jobs during February. Today's reading came in ahead of the consensus (150,000), and indicated the services sector was responsible for the bulk of the job gains.
At the MCX, gold prices for April delivery closed higher by Rs 24 (0.08%) at Rs 29,593 per ten grams. Prices rose to a high of Rs 29,700 per 10 grams and fell to a low of Rs 29,427 per 10 grams during the day's trading.
At the MCX, silver prices for May delivery closed higher by Rs 255 (0.5%) at Rs 54,968/Kg. Prices opened at Rs 54,810/kg and rose to a high of Rs 55,500/Kg during the day's trading.
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