Bullion kick off new month in a mixed note

Bullion metal prices ended mixed once again on Monday, 01 April 2013. Prices kicked off the new month and new quarter in a mixed mode. Gold prices ended the U.S. day session higher but silver dropped. The precious metal was given a boost by a weaker U.S. dollar index. There was also some fresh safe-haven buying interest in gold Monday as North Korea's leader continues to make threatening comments toward the U.S. and South Korea.

Gold for April delivery ended higher by $5.2 or 0.3 % at $1,600.9 an ounce on the Comex division of the New York Mercantile Exchange on Monday.

May silver ended lower by 38 cents (1.3%) at $27.94 an ounce on Monday.

The Cyprus bank bailout situation has calmed down for the moment, with most of Europe on vacation for the Easter holiday on Monday. However, the overall European Union sovereign debt crisis remains as an undercurrent in the risk assessment of the market place and will also remain supportive for safe-haven assets like gold.

In overnight news, China's official purchasing managers' index was 50.9 in March, which is up from 50.1 in February but just below market expectations. Traders and investors are looking ahead to Friday's release of the U.S. employment situation report, which is arguably the most important U.S. economic report of the month.

U.S. economic data released Monday included the U.S. manufacturing PMI, construction spending and the ISM manufacturing report on business. Overall, that data was just a bit on the weak side, which was also mildly supportive for the precious metals markets on Monday.

Reviewing today's economic data, construction spending rose 1.1% in February after falling 2.1% in January. The consensus expected construction spending to rise 0.9%. Private construction spending increased 1.3% after declining 3.1% in January. Public spending increased 0.9%, up from a 0.2% gain in January. Separately, Markit's reading of U.S. manufacturing in March came in at 54.6%, less than the 55% level market had expected.

The ISM Manufacturing Index dropped to 51.3 in March from 54.2 in February. That was the first drop since November, and should not have been too surprising given the mixed March regional manufacturing surveys. New order levels softened as the related index fell from 57.8 in February to 51.4 in March. In addition, order backlogs also weakened, from 55.0 to 51.0.

The U.S. dollar index, which weighs the strength of the dollar against a basket of six other currencies fell by 0.25% on Monday.

At the MCX, gold prices for April delivery closed higher by Rs 42 (0.14%) at Rs 30,027 per ten grams. Prices rose to a high of Rs 30,099 per 10 grams and fell to a low of Rs 29,976 per 10 grams during the day's trading.

At the MCX, silver prices for May delivery closed lower by Rs 347 (0.65%) at Rs 52,725/Kg. Prices opened at Rs 53,205/kg and fell to a low of Rs 52,554/Kg during the day's trading.

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