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Precious metals end 0.2% higher

Capital Market 

Gains were limited due to ideas the situation in Ukraine has de-escalated

Precious metal prices ended slightly higher on Wednesday, 05 March 2014. Prices were supported by some fresh U.S. economic reports that once again favored the weak side of market expectations. Gains in gold were limited on some selling pressure due to ideas the situation in Ukraine has de-escalated and the worst of that crisis is over. Gold futures closed with a modest gain on Wednesday, with news of slower expansion in service-sector companies luring some investors back to the precious metal after a steep price loss in the previous session.

Gold for April delivery tacked on $2.40, or 0.2%, to settle at $1,340.30 an ounce on the Comex division of the New York Mercantile Exchange.

May silver closed up 5 cents, or 0.2%, at $21.27 an ounce after a loss of 1.2% in the previous session.

U.S. economic data released Wednesday was again on the weak side of market expectations, including the ADP national employment report and the ISM non-manufacturing report on business. The Fed's beige book report was released Wednesday afternoon and showed the severe winter weather negatively impacted many sectors of the U.S. economy. The Fed report had little impact on markets. Focus now is on the U.S. Labor Department's monthly jobs report due out on Friday.

On the Ukrainian crisis front, markets have been somewhat assuaged as Russian president Putin on Tuesday said he was not planning on using military force in the Ukraine, even though his additional troops are on the ground there. Putin has also halted his military exercises near the Ukrainian border and ordered troops there back to their bases. The above developments have put risk appetite back into the market place.

It was reported Wednesday that Chinese officials say they want to keep the world's second-largest economy on a 7.5% annual economic growth path for 2014. That rate is a bit higher than many expected and is a bullish underlying factor for the raw commodity sector. China is the world's largest consumer of raw commodities.

In other news Wednesday, the Euro zone showed stronger economic strength to start 2014, according to the Markit purchasing managers index, which rose to 53.3 in February from 52.9 in January. This particular reading was the highest since June of 2011. Also, European Union retail sales data rose by 1.6% in January from December, which is the best month-on-month growth rate in over a dozen years. These reports fall into the camp of those not looking for any further European Central Bank monetary policy stimulus forthcoming. The ECB holds its monthly monetary policy meeting on Thursday.

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First Published: Thu, March 06 2014. 10:04 IST
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