Spot gold prices traded lower last week on strength in the dollar index coupled with easing of geo-political tensions dragging the yellow metal lower. Gold prices fell even though U.S. President Barack Obama authorized air strikes against Islamic State and more sanctions on Russia on cards. Holdings in SPDR Gold Trust, the world’s top gold-backed exchange traded fund, have been falling recently while physical demand is also quiet.
In India, the second-largest gold buyer, Trade Minister Nirmala Sitharaman said the government is not considering an immediate cut in gold import duty.
In the international markets, spot gold prices declined by 3.19 percent and closed at $1228.13/oz. On the MCX, gold prices declined by 1.75 percent and closed at Rs.26898/10gms.
Spot silver prices in the international markets declined in tandem with fall in gold prices. Strength in the dollar along with weakness in the base metals complex dragged prices further. Ease of geo-political tensions between Russia and Ukraine also dragged prices further. Fall in nickel prices also dragged prices further exerting downside pressure.
Spot silver prices in the international markets declined by around 2.98 percent and closed at $18.57/oz. On the MCX, silver prices declined by 0.01 percent taking cues from weak international markets and closed at Rs.41309/kg.
On an intraday basis, we expect gold and silver prices to trade lower on declining safe haven bids as US economy is gaining traction. Strength in the dollar further will also exert downside pressure on the precious metals pack.