Prices recover from daily lows as dollar weakens
Bullion metal prices ended lower on Thursday, 04 April 2013. Prices did move well up from the daily low by the New York close. Gold prices even pushed modestly above unchanged in after-hours electronic trading on Thursday afternoon. A weakening U.S. dollar index as the session wore on lifted gold prices up from a 10-month low hit in overnight trading.
Gold for June delivery ended lower by $1.1 or 0.1% at $1,552.4 an ounce on the Comex division of the New York Mercantile Exchange on Thursday.
May silver ended lower by 3 cents (0.1%) at $26.77 an ounce on Thursday.
The gold market has recently seen selling pressure from the exodus of investors from exchange trade funds (ETFs). Reports overnight said the first quarter of 2013 showed a significant outflow of investor monies from gold-related ETFs. However, there were also reports that demand for physical gold has picked up this week as bargain hunters step in to buy amid the big drop in gold prices.
Gold and silver prices showed little reaction to a weaker-than-expected U.S. jobless claims report Thursday morning. Traders and investors are awaiting Friday morning's release of the U.S. Labor Department's employment situation report, which is arguably the most important U.S. economic report of the month. The consensus forecast for that report calls for the key non-farm payrolls figure to have risen by 200,000 in March, with the overall unemployment rate unchanged from the previous month, at 7.7%.
In news overnight, the Bank of Japan embarked on more monetary easing at its latest policy meeting. The move was not unexpected but the BOJ did act more aggressively to ease monetary policy than many expected. The BOJ move is an underlying bullish factor for the precious metals and the raw commodity sector. The European Central Bank and Bank of England also hold monetary policy meetings on Thursday. Both the BOE and ECB left their interest rates and monetary policies unchanged. The Euro currency fell against the U.S. dollar following more downbeat economic news coming out of the European Union Thursday. German and French purchasing managers' data came in weaker than expected. Most agree the Euro zone is presently in a full-blown economic recession.
The U.S. dollar index, which weighs the strength of the dollar against a basket of six other currencies, fell by 0.15% on Thursday.
Looking back at today's economic data at Wall Street, the initial claims level jumped to 385,000 for the week ending 30 March from 357,000 for the week ending 23 March 2013. The consensus expected the initial claims level to fall to 345,000.
The increase in claims is not the result of a sudden softening in labor market conditions. The seasonal adjustments used by the DOL have a difficult time accounting for the Easter holiday. Because the Easter holiday falls on a different date each year, the seasonal adjustments from one year to the next cannot adequately explain seasonal employment fluctuations from Easter-related hiring and firing.
At the MCX, gold prices for June delivery closed higher by Rs 167 (0.7%) at Rs 29,405 per ten grams. Prices rose to a high of Rs 29,435 per 10 grams and fell to a low of Rs 29,132 per 10 grams during the day's trading.
At the MCX, silver prices for May delivery closed higher by Rs 233 (0.45%) at Rs 50,955/Kg. Prices opened at Rs 50,664/kg and rose to a high of Rs 51,074/Kg during the day's trading.
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