Bright day for precious metals

Bullion metal prices ended substantially higher on Thursday, 06 June 2013 helped by a weak dollar. Comex gold futures prices ended the U.S. day session with solid gains and hit a three-week high on Thursday, ahead of Friday's U.S. jobs report. A sharply lower U.S. dollar index also supporting good buying interest in gold.

Gold for August delivery ended higher by $17.3 (1.2%) at $1,415.8 an ounce on the Comex division of the New York Mercantile Exchange on Thursday. It fell to a low of $1391.2 earlier during the day.

July silver ended higher by $0.235 cents (1.1%) at $22.71 an ounce on Thursday.

Gold prices may have also seen just a bit of safe-haven demand develop on Thursday when the U.S. stock indexes sold off and were trading near their daily lows. The stock indexes were posting a rebound in early afternoon trading, which did prompt gold prices to back down from their daily highs.

The results of the monthly monetary policy meetings of the European Central Bank and Bank of England saw no changes in interest rates. Neither central bank was expected to make any major policy announcements or interest rate changes. The Euro currency rallied and the dollar index slumped by some upbeat comments on the European Union's economic prospects in the coming months from ECB president Draghi.

Draghi said the ECB sees a gross domestic contraction of 0.6% in 2013 versus a March forecast of a 0.5% drop. The ECB lifted its 2014 growth forecast slightly, to 1.1% from 1%.

In the currency market, the dollar index, which weighs the strength of the dollar against a basket of six other currencies, fell by 1% on Thursday.

Regarding economic data expected at Wall Street, the initial claims level fell to 346,000 for the week ending 1 June from an upwardly revised 357,000 (from 354,000) for the week ending 25 May. The consensus expected the initial claims level to drop to 348,000. For the past few weeks, the initial claims level has bounced around the 350,000 level without showing any signs of picking up traction, up or down. Labor market conditions appear to be stable at a level that is consistent with payroll growth above 150,000.

At the MCX, gold prices for June delivery closed higher by Rs 221 (0.8%) at Rs 27,905 per ten grams. Prices rose to a high of Rs 28,038 per 10 grams and fell to a low of Rs 27,490 per 10 grams during the day's trading.

At the MCX, silver prices for July delivery closed higher by Rs 280 (0.63%) at Rs 44,508/Kg. Prices opened at Rs 44,218/kg and rose to a high of Rs 44,744/Kg during the day's trading.

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