Precious metals turn pale

Gains in US stocks lure investors away from the precious metal

Bullion prices ended lower on Wednesday, 09 April 2014. Gold futures settled lower as gains in the U.S. equities market lured investors away from the precious metal, but prices climbed in electronic trading from the Comex close after the release of minutes from the Federal Reserve's March meeting. Gold prices were trading near unchanged in the immediate aftermath of Wednesday afternoon's release of the minutes of the latest meeting of the Federal Reserve's Open Market Committee (FOMC).

Gold for June delivery fell $3.20, or 0.2%, to settle at $1,305.90 an ounce on the Comex division of the New York Mercantile Exchange before the release of the Fed minutes. Prices for the contract climbed from the close to trade at $1,310.20 in the electronic session shortly after the minutes.

May silver dropped 29 cents, or 1.4%, to end $19.77 an ounce before the minutes and traded at $19.85 after the minutes.

The FOMC report was arguably the most important data point of the week for the market place. The latest FOMC minutes seemed to have the Fed officials clarifying the last FOMC statement that the market place read as a bit hawkish. Specifically, the minutes revealed that policymakers are not necessarily committed to hiking the fed funds rate in the first half of 2015.

Other U.S. economic data released Wednesday included the weekly MBA mortgage applications survey, monthly wholesale trade, and the weekly DOE liquid energy stocks report. None had a significant impact on the market place.

The Wholesale Inventories report, pointed to an increase of 0.5% in February after increasing an upwardly revised 0.8% (from 0.6%) in January. The consensus expected wholesale inventories to increase 0.5%. There were concerns that strong inventory growth in February would be the result of severe winter weather conditions.

The Russia-Ukraine matter is moving back toward the front burner of the market place this week. Gold would likely see safe-haven demand increase on any escalation of this conflict.

The slumping U.S. dollar index has been a feature in the market place this week. If the greenback continues to sink it would become a more significant bullish underlying factor for the raw commodity sector.

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