Bullion metal prices ended lower on Wednesday, 03 April 2013. Gold prices ended the U.S. day session sharply lower and hit a 10-month low on Wednesday. Sharply lower crude oil prices and a generally weak raw commodity sector on Wednesday also led to downside price pressure in gold. Reports this week said exchange traded funds (ETFs) are also seeing investors liquidate their paper gold positions.
Gold for June delivery ended lower by $22.4 or 1.4% at $1,553.5 an ounce on the Comex division of the New York Mercantile Exchange on Wednesday.
May silver ended lower by 45 cents (1.7%) at $26.8 an ounce on Wednesday.
There was no specific fundamental news event either Tuesday or Wednesday to account for the strong selling pressure in the gold market. The recent gains in the U.S. stock market, as well as generally stronger stock markets worldwide, have worked to funnel investor and trader monies away from hard assets like gold.
In overnight news, there were new developments on the Cyprus banking crisis front Wednesday. The island nation reached an agreement with the IMF for an additional 1 billion Euro lifeline loan. There was little market reaction to that news. Euro zone inflation rose at its slowest rate in two years in March, at a 1.7% annualized rate, according to the Euro zone statistics bureau, Eurostat. There are key central bank meetings of the European Central Bank, the Bank of Japan and Bank of England on Thursday, all of which will be closely monitored by the market place.
The U.S. dollar index, which weighs the strength of the dollar against a basket of six other currencies, fell by 0.15% on Wednesday.
Looking back at today's economic data at Wall Street, the weekly MBA Mortgage Applications fell 4.0% to follow last week's rise of 7.7%.
According to today's ADP National Employment Report, employment in the nonfarm private business sector rose by 158K in March. This was below the increase of 197K expected.
The ISM Non-manufacturing index softened in March, falling from 56.0 in February to 54.4. The market had expected the index to drop to 55.5.
At the MCX, gold prices for June delivery closed lower by Rs 367 (1.2%) at Rs 29,238 per ten grams. Prices rose to a high of Rs 29,578 per 10 grams and fell to a low of Rs 29,180 per 10 grams during the day's trading.
At the MCX, silver prices for May delivery closed lower by Rs 751 (1.45%) at Rs 50,722/Kg. Prices opened at Rs 51,240/kg and fell to a low of Rs 50,423/Kg during the day's trading.
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