Commodity World for April 21 , 2014 …

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MCX Gold Jun 2014

Gold settled down -0.29% at 28505 ended the week sharply lower on Thursday, falling below the $1,300 level as indications that the U.S. economic recovery is progressing dampened safe haven demand for the precious metal. Gold came under pressure after upbeat U.S. data on manufacturing and employment pointed to underlying strength in the economy.

The Labor Department reported the number of people filing for unemployment benefits edged up to 304k, below market’s forecasts and not far from the 6year low of 300k touched the previous week. A separate report showed that manufacturing activity in the Philadelphia region strengthened more than forecast in April.

Meanwhile, concerns over the crisis in eastern Ukraine eased on Thursday after Russia, Ukraine, the US and the EU said an agreement on steps to “de-escalate” the crisis had been reached. Gold, seen as a safe haven investment, usually benefits from economic and geopolitical turmoil.

Concerns over weakening demand from top buyer China also weighed on gold prices. Prices for the precious metal posted the largest one day decline since December 19 on Tuesday after the World Gold Council said that Chinese gold demand is likely to remain flat this year, as a result of the country’s economic slow down and constrained credit markets. More importantly, the sharp dip in holdings of gold-backed ETF could weigh on prices.

Also SPDR Gold Trust, the world’s largest gold-backed ETF, said its holdings fell 3.29tonnes to 795.14 tonnes on Thursday. Technically market is under fresh selling and getting support at 28437 and below same could see a test of 28370 level, And resistance is now likely to be seen at 28594, a moveabove could see prices testing 28684.

MCX Silver May 2014

Silver settled down -0.09% at 42377 fall tracking fall in the gold prices which dropped as dented by hopes that diplomatic efforts can calm violence in Ukraine and by strengthening U.S. economic data. Fears over slowing demand in top consumer China and sustained sales from gold-backed funds also contributed to its fall below $1,300 an ounce.

Silver came under pressure after upbeat U.S. data on manufacturing and employment pointed to underlying strength in the economy. The Labor Department reported the number of people filing for unemployment benefits edged up to 304,000, below market forecasts and not far from the six-and-a-half year low of 300,000 touched the previous week.

A separate report showed that manufacturing activity in the Philadelphia region strengthened more than forecast in April. Meanwhile, concerns over the crisis in eastern Ukraine eased on Thursday after Russia, Ukraine, the U.S. and the European Union said an agreement on steps to “de-escalate” the crisis had been reached.

Gold, seen as a safe haven investment,usually benefits from economic and geopolitical turmoil. Any escalation in tensions between Russia and the West over Ukraine could offer some upside. Separatists flew the Russian flag on armoured vehicles taken from the Ukrainian army, humiliating a Kiev government operation to recapture eastern towns controlled by pro-Moscow partisans.

Technically market is under long liquidation as market has witnessed drop in open interest by -1.85% to settled at 14663 while prices down -39 rupee, now Silver is getting support at 42172 and below same could see a test of 41967 level, And resistance is now likely to be seen at 42576, a move above could see prices testing 42775.

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