Mixed finish for bullions

Gold for February delivery fell $2(0.1%) to settle at $1,693.8 an ounce on the Comex division of the New York Mercantile Exchange on Wednesday. It hit a low of $1,686.6 and a high of $1,708.3 during intra day trading. Prices shed 2.3% last week.

On Wednesday, March silver rose 15 cents, or 0.5%, to settle at $32.96 an ounce. Prices shed 2.5% last week.

The dollar index, which weighs the strength of the dollar against a basket of six other currencies, rose by 0.2% on Wednesday.

The focus of the U.S. market place remains on the "fiscal cliff" tax increases and spending cuts that is fast approaching. U.S. lawmakers are still jawboning on the matter, with the market place paying less attention to the politicians' rhetoric. While the market place presently perceives odds are higher than not that there will be a last-minute agreement among U.S. lawmakers to avoid the fiscal cliff, the overall situation has been a bearish drag on many markets, including the raw commodities and stock markets.

Traders and investors are starting to look ahead to next week's last Federal Reserve FOMC meeting of the year, on December 10 and 11. The "Operation Twist" program ends and the FOMC members must decide whether to extend the bond-buying program. Many believe the Fed will continue to purchase U.S. Treasuries and implement "QE4" at next week's meeting. That would be raw-commodity market bullish, including bullish for the precious metals markets.

In overnight news, Asian stocks rallied on news that Chinese government officials have said they want to stimulate their economy by implementing more construction projects. Also, China's purchasing managers index showed further expansion in November. This news is an underlying supportive factor for the metals markets.

There was more dour economic news coming out of the European Union Wednesday, further suggesting that bloc is in recession. Retail sales fell in October, while purchasing manager surveys in the region showed private-sector business activity declined in November, amid reduced consumer spending. Meanwhile, tepid demand at a Spanish government bond auction pushed Spanish bond yields up on Wednesday.

In terms of economic data at Wall Street, the weekly MBA Mortgage Index pointed to a 4.5% rise in new mortgage applications during the past week. Today's reading followed prior week's decline of 0.9%. According to today's ADP National Employment Report, employment in the nonfarm private business sector rose by 118K in November. This was above the 125K increase expected by the consensus.

Productivity data for the third quarter showed an increase of 2.9%, which was better than the 1.9% increase that had been reported in the preliminary reading. It was also better than the 2.7% increase that had been broadly expected. Unit labor costs for the third quarter were revised lower to reflect a 1.9% decrease after they had reportedly slipped 0.1% in the preliminary reading. Market had expected that unit labor costs would tick down in the revised reading to reflect a decrease of 0.8%.

At the MCX, gold prices for February delivery closed lower by Rs 167 (0.53%) at Rs 31,199 per ten grams. Prices rose to a high of Rs 31,465 per 10 grams and fell to a low of Rs 31,136 per 10 grams during the day's trading.

At the MCX, silver prices for March delivery closed lower by Rs 181 (0.3%) at Rs 62,324/Kg. Prices opened at Rs 62,610/kg and fell to a low of Rs 61,925/Kg during the day's trading.

Powered by Capital Market - Live News