Metal Traders Sidelined

Gold eased by $1.70 to trade at 1370.90 as traders sit tight ahead of next week’s FOMC meeting and keep an eye on global tensions in Eurasia. Gold prices gained around 0.2 percent yesterday taking cues from escalating geo-political tensions between Russia and Western nations over Ukraine. Russia launched new military exercises near its border with Ukraine on Thursday, showing no sign of backing down on plans to annex its neighbor’s Crimea region despite a stronger than expected drive for sanctions from the EU and United States. Gold is headed for its biggest gain in nearly four weeks as investors exited risky assets and divert their investments in gold. Gold prices are expected to move higher for the day over increasing tensions in Ukraine and over poor Chinese economic data came yesterday. Gold prices moved higher marginally by 0.14% yesterday as tensions in Ukraine and worries over China continued. Russia launched new military exercises near its border with Ukraine on Thursday, showing no sign of backing down despite a stronger than expected drive for sanctions from the EU and United States. German Chancellor Angela Merkel warned of “catastrophe” unless Russia changes course. SPDR holdings moved higher by 2.1 tonnes to 813.3 tonnes. The Bank of England is consulting users of its gold vaults over a review of its charges for storing and handling bullion.

Gold and silver prices are expected to trade on a positive note today on the back of rise in safe haven demand due to geopolitical tensions between Ukraine and Russia. Silver edged up 14 points this morning to trade at 21.212. Traders are more in a look see mood today.

Copper continued to ease as industrial metal traders worried about China’s economic situation along with the effects on banking and liquidity. Copper prices declined around 1.5 percent yesterday taking cues from decline in China’s industrial production thereby increasing growth concerns in world’s second largest economy. Further, strength in the DX along with weak market sentiments exerted downside pressure on the prices. However, favorable retail sales and jobless claims data from the US coupled with decline in LME copper inventories by 0.9 percent cushioned sharp fall in the prices. Copper is trading at 2.92 down by 2 points in the early session.  Platinum and palladium diverged from copper with platinum gaining $2.70 to trade at 1480.20 while palladium added $1.40 to hit 778.90.