Bullions drop for forth time in five sessions

Prices give back much of their recent gains as market digests a deluge of economic data

Bullion metal prices ended lower again on Thursday, 26 September 2013 at Comex. Prices settled lower on Thursday, giving back much of their recent gains with the market digesting a deluge of economic data, including a decline in U.S. pending home sales and jobless claims. Traders continued to watch for a potential U.S. government shutdown that might spur safety bids.

December gold ended lower by $12.1 (0.9%) at $1324.1 per ounce in morning action on Thursday.

December silver ended lower by 12 cents or 0.6% of $21.77 per ounce.

It was announced yesterday that the U.S. government (Commodity Futures Trading Commission) closed its years-long probe into manipulation of the silver futures market, saying it had no hard evidence that such had occurred.

The U.S. budget and debt ceiling issues are looming and will be debated by the U.S. Congress and the Obama administration the next few weeks. This will become a front-burner matter for the market place, and one that could be significantly bearish for most markets, as there is already talk the U.S. government could shut down for a short time.

On the economic front at Wall Street today, the weekly initial claims level fell to 305,000 from an upwardly revised 310,000 (from 309,000). The consensus expected the initial claims level to increase to 325,000. There were no special factors that impacted the initial claims this week. The computer glitches, which caused biases over the previous two weeks, have been corrected. As such, the report suggests real improvement in labor conditions in September.

Separately, the third estimate for second quarter GDP was little changed at 2.5%. The GDP price deflator, though, was revised down to 0.6% from 0.8%.

Also of note, pending home sales for August fell 1.6%, which was better than the 2.3% decrease expected by the consensus. Today's reading followed last month's decrease of 1.3%.

At the MCX, gold prices for December delivery closed lower by Rs 455 (1.5%) at Rs 29,419 per ten grams. Prices rose to a high of Rs 29,892 per 10 grams and fell to a low of Rs 29,291 per 10 grams during the day's trading.

At the MCX, silver prices for December delivery closed lower by Rs 532 (1.1%) at Rs 48,639/Kg. Prices opened at Rs 49,000/Kg and fell to a low of Rs 48,322/Kg during the day's trading.

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