Precious metals eke out gains

Bullion metal prices ended moderately higher on Monday, 15 July 2013 at Comex. Gold prices ended higher as traders weighed financial woes in the euro zone and looked ahead to U.S. Federal Reserve Chairman Ben Bernanke's testimony later this week. Some weaker-than-expected U.S. economic data also helped to lift gold and silver prices.

Gold for August delivery ended higher by $5.9 (0.5%) at $1,283.5 an ounce on the Comex division of the New York Mercantile Exchange on Monday.

September silver ended higher by $0.05 (0.2%) at $19.84 an ounce on Monday.

Federal Reserve Chairman Ben Bernanke in a speech on Wednesday after most U.S. markets were closed said the U.S. central bank still needs to be very accommodative in its monetary policy for economic growth to continue, and that the Fed will not raise interest rates for some time to come. Bernanke's remarks, along with the FOMC minutes, released Wednesday afternoon, showing a deep split between members on when to start to wind down the Fed's monthly bond-buying program (quantitative easing) has at least temporarily changed the market place's notions of when QE will begin to be scaled back.

The gold market was trading firmer overnight and then dipped right around the open of U.S. Comex futures trading. The U.S. dollar index dropped from its daily high on that news, which in turn allowed the gold market to push higher, where it stayed for much of the rest of the session.

The highly anticipated China second-quarter gross domestic product report, released Monday, showed an as-expected annual growth rate of 7.5%. China GDP has decreased slightly for the second quarter in a row. China industrial output rose by 8.9% on an annual basis in June, which was slightly below expectations. Asian stock markets posted modest gains on the China data, while the precious metals were also slightly supported by the data.

The world market place is starting to look ahead to Wednesday's appearance by Federal Reserve Chairman Ben Bernanke before the U.S. House of Representatives, where he will report on U.S. monetary policy and the economy. Traders hope the Fed chief will offer fresh clues on when the Fed will start to back off on its monthly bond-buying program (quantitative easing).

The U.S. dollar index, which weighs the strength of the dollar against a basket of six other currencies, fell by 2% on Monday.

Among economic data expected at Wall Street today, data of the day pointed to a 0.4% increase in June retail sales. That was below the consensus estimate, which called for an increase of 0.7%. Excluding autos, retail sales were flat, which was disappointing relative to the 0.4% consensus estimate. Separately, May business inventories ticked up 0.1% after increasing 0.2% in April. The consensus expected inventory levels to decline 0.1%.

At the MCX, gold prices for August delivery closed lower by Rs 305 (1.1%) at Rs 26,438 per ten grams. Prices rose to a high of Rs 26,925 per 10 grams and fell to a low of Rs 26,388 per 10 grams during the day's trading.

At the MCX, silver prices for September delivery closed lower by Rs 530 (1.3%) at Rs 40,950/Kg. Prices opened at Rs 41,536/Kg and fell to a low of Rs 40,871/Kg during the day's trading.

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