Gold, silver prices may trade sideways to lower: Angel

Written By Unknown on Senin, 02 Juni 2014 | 14.03

Gold and silver prices are expected to trade sideways to lower as the recent bout of selling is expected to continue this week also, says Angel Commodities.

Angel Commodities' report on bullion

Gold
For continuous fifth week in a row spot gold prices have been trading lower and trading below the $1300 mark. Prices were pressurized on ease of geo-political tensions after exit polls in Ukraine gave pro-Western billionaire Petro Poroshenko more than 55 per cent of the vote, a magnate with long experience in government and diplomatic ties to both Russia and the West could help the country troubled by geo-political tension. Rising equities in the US and optimism about the US economy also triggered heavy bout of selling. Expectations of rate cuts by the European Central Bank stoked investor appetite for equities.

The economic data released from US also paints a bright picture as orders for U.S.-made durable goods unexpectedly rose in April and consumer confidence perked up in May, supporting views of a rebound in economic growth. Besides, lack of investment demand and soft physical demand also exerted downside pressure on prices.

Silver
Taking cues from weakness in gold prices even spot silver prices continued to trade lower last week. Weakness across the base metals complex and strength in the Dollar index were the prime factors for decline of more than 2 percent in spot silver prices. In the domestic markets, silver prices declined taking cues from international markets coupled with weakness in domestic gold prices

Outlook
On an intraday basis, we expect gold and silver prices to trade sideways to lower as the recent bout of selling is expected to continue this week also. The spate of economic indicators released in the recent weeks shows that US is on a path of growth trajectory suggesting a decline in bullions safe haven appeal. Also, the tensions between Ukraine and Russia seem to have intensified as Russia has threatened to cutoff gas supplies to Ukraine as early as Tuesday will act as a positive factor. On the MCX, gold and silver prices are expected to trade on lower note on revision of base price for gold to $408/10 gms from $424/10 gms while silver base import prices revised from $617/kg from $650/kg.

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