Precious Metals Weigh Down On Weak US Economic Data: April 23, 2012

On a weekly basis, spot gold prices declined on the back of escalating concerns over Europe’s debt crisis and weak economic data from the US which resulted choppy sentiments in the global markets in the initial part of the week.

In the mid week, gold prices trimmed most of its losses due to positive growth forecast from the International Monetary Fund (IMF) which raised its 2012 global economic growth forecast to 3.5 percent from the previous 3.3 percent. Additionally, successful Spanish bond auctions also helped to improve market sentiments in the later part of the week which also helped gold to recover most of its losses.

On the MCX, the gold June contract rose around 0.3 percent and touched a high of Rs.28,780/10 gms last week. The Indian rupee depreciated sharply by 1 percent last week and a weaker rupee led gains on the domestic platform.

Holdings in the SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, remained unchanged at 1,286.17 tonnes by 20th April 2012. While on a year-to-date basis, gold holdings rose by around 2.5 percent from the previous level of 1,254.57 tonnes on 31st December 2011.

Silver

Spot silver prices traded higher in the last week, taking cues from weakness in the US Dollar Index and revival in the global markets due to successful Spanish bond auction. Additionally, upside movement in base metals complex also helped further gains in prices last week.

The white metal touched a high of $32.01/oz and closed its trading session at $ 31.64/oz in the last week. On the MCX, the silver May contract gained around 1.2 percent as depreciation on the Indian rupee supported further rise on the domestic bourses and touched a high of Rs56,899/kg during the week.

On a week-on-week basis, holdings in the iShares Silver Trust, the world's largest silver-backed exchange-traded fund, declined by 0.4 percent to 9,552.14 tonnes by 20th April 2012 from the previous level of 9591.39 tonnes on 13th April 2012.