Bullion metal prices ended at their highest levels in two weeks on Thursday, 30 May 2013. Prices rose following weaker dollar, disappointing U.S. economic data and strong physical demand in Asia, which combined to lift prices above $1,400 an ounce.
Gold for August delivery ended higher by $20.20 (1.5%) at $1,412 an ounce on the Comex division of the New York Mercantile Exchange on Thursday.
July silver ended higher by $0.24 cents (1.1%) at $22.69 an ounce on Thursday.
Gold saw safe-have demand develop in overnight trading in Asia and Europe. Asian stock markets were sharply lower, with Japan's Nikkei stock index down 5% on Thursday and down nearly 15% in a week. The sell-off in the Asian stock markets prompted some fresh safe-haven demand for gold.
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.
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, fell by 0.3%.
Thursday's batch of U.S. economic data was generally weak, highlighted by the weekly jobless claims report that showed more claims than expected and the second-quarter gross domestic product reading that was just on the weak side. Pending U.S. home sales also did not meet expectations.
Regarding economic data expected at Wall Street, initial claims for the week ending 25 May jumped by 10,000 to 354,000. The consensus had expected the claims level to be 340,000. That bumped up the four-week moving average by 6,750 to 347,250.
The second estimate of first quarter GDP produced a small downward revision to 2.4% from 2.5% (consensus +2.5%) while the GDP deflator slipped to 1.1% from 1.2% (consensus +1.2%). The upshot of the revision was that personal consumption expenditures growth was revised higher to 3.4% from 3.2%. That was the highest growth rate since the fourth quarter of 2010 and it boosted the PCE contribution to GDP growth to 2.4 percentage points from 2.2 percentage points at the first estimate. Increases in private inventory investment, exports, and imports were less than previously estimated. The lower contribution from the change in private inventories and nonresidential structures were offsetting factors to the uptick in the PCE contribution.
Lastly, pending home sales for April rose 0.3%, which was worse than the 1.5% increase forecast by the consensus. Today's reading follows last month's rise of 1.5%.
At the MCX, gold prices for June delivery closed higher by Rs 532 (2%) at Rs 27,403 per ten grams. Prices rose to a high of Rs 27,450 per 10 grams and fell to a low of Rs 26,810 per 10 grams during the day's trading.
At the MCX, silver prices for July delivery closed higher by Rs 714 (1.6%) at Rs 44,421/Kg. Prices opened at Rs 43,590/kg and rose to a high of Rs 44,925/Kg during the day's trading.
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