Precious metals shed shine

Gold for February delivery fell $6.7 (0.4%) to settle at $1,655.5 an ounce on the Comex division of the New York Mercantile Exchange on Wednesday.

On Wednesday, March silver fell $0.22, or 0.7% to settle at $30.25 an ounce.

The market place has been quieter this week amid the lack of major, fresh fundamental news developments. Traders and investors are wondering what the next moves will be by U.S. lawmakers and the Obama administration regarding taxing and spending measures. Most look for a big fight among the politicians, which is keeping a lot of speculative and investment money on the sidelines at present. Traders are awaiting Thursday's monthly European Central Bank meeting. Asian traders are awaiting a fresh batch of Chinese economic data due out later this week and during the weekend.

The U.S. dollar index was higher Wednesday. In the currency market, the dollar index, which weighs the strength of the dollar against a basket of six other currencies rose by 0.2% on Wednesday. The U.S. dollar gained on Wednesday, with the Japanese yen retracing a short-lived rebound and the euro losing ground on the eve of the European Central Bank's monthly policy meeting.

Deutsche Bank joined other institutions that have cut their outlooks on gold prices, revising lower its 2013 and 2014 forecasts on Tuesday. Deutsche Bank reduced its average gold forecast for this year by 12.1% to $1,856 an ounce, as well as by 5% to $1,900 an ounce for 2014. Deutsche Bank also cut its price outlook for silver, by 16.8% to $37 an ounce for 2013 and by 5% to $38 for 2014.

The shine of last week's temporary U.S. fiscal cliff agreement by U.S. lawmakers has quickly faded. The market place is now looking forward with trepidation to the upcoming negotiations between the U.S. Congress and the Obama administration on budget and spending matters. Such is likely to limit trader and investor participation in many markets in the coming weeks.

At the MCX, gold prices for February delivery closed lower by Rs 180 (0.6%) at Rs 30,794 per ten grams. Prices rose to a high of Rs 31,004 per 10 grams and fell to a low of Rs 30,772 per 10 grams during the day's trading.

At the MCX, silver prices for March delivery closed lower by Rs 500 (0.85%) at Rs 57,970/Kg. Prices opened at Rs 58,350/kg and fell to a low of Rs 57,705/Kg during the day's trading.

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