Bullions shed glaze

News of fresh outflows of exchange traded funds affect prices

Bullion metal prices ended lower on Tuesday, 07 May 2013. Gold ended the U.S. day session solidly lower on Tuesday on consolidation and news of fresh outflows of investor money from gold-backed exchange traded funds.

Gold for June delivery ended lower by $19.2 (1.3%) at $1,448.8 an ounce on the Comex division of the New York Mercantile Exchange on Tuesday.

July silver ended lower by $0.15 cents (0.6%) at $23.81 an ounce on Tuesday.

The gold futures market Tuesday saw intensified selling pressure emerge in late-morning trading when reports showed outflows of investor monies from exchange traded funds (ETFs) continues. ETF Securities Tuesday reported its biggest outflow of investor money in over 3.5 years occurred last week for its gold-backed commodities fund. This fresh, bearish ETF news comes on top of recent reports that showed investor exodus in gold-backed ETFs during the first quarter of this year and into April.

In overnight news, Australia's central bank cuts its key interest rate to a record low of 2.75% in an effort to keep its economy afloat and to weaken the Australian dollar. The country's central bank cut its key interest rate by 25 basis points, which sent the Australian dollar lower. In Asian trading the Japanese stock market hit a five-year high on the first trading day after the Golden Week holiday break. There will be some key economic data from China released on Wednesday and Thursday.

Latest economic data from US showed that consumer credit increased by $8.0 billion in March. That was down from an upwardly revised $18.6 billion (from $18.1 billion) in February. The consensus expected consumer credit to increase by $16.3 billion. That was the first time since September 2012 that consumer credit did not increase by at least $10.0 billion.

In the currency market, the dollar index, which weighs the strength of the dollar against a basket of six other currencies, rose by 0.25% on Tuesday.

At the MCX, gold prices for June delivery closed lower by Rs 374 (1.4%) at Rs 26,722 per ten grams. Prices rose to a high of Rs 27,049 per 10 grams and fell to a low of Rs 26,594 per 10 grams during the day's trading.

At the MCX, silver prices for July delivery closed lower by Rs 307 (0.7%) at Rs 44,861/Kg. Prices opened at Rs 45,031/kg and fell to a low of Rs 44,180/Kg during the day's trading.

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