Precious & Industrial Metals Trade At Record Lows

 Gold fell below the $1,300-an-ounce mark while July silver contract fell to a 33-month low today. The falling spree was fueled by Federal Reserve chief Ben Bernanke’s remarks that the central bank might begin pulling back its bond buying program if the US economy continued to improve as per the bank’s estimates.

Gold prices continued to fall on Bernanke’s comments that Fed is likely to slow the pace of the central bank’s bond purchases later this year and bring them to a halt around mid-2014.

CME has increased the margin requirements by 25% on gold trading after prices fell to the lowest since September 2010. SPDR Gold Trust, the largest gold-backed exchange-traded fund’s holdings fell 0.42 percent to 995.35 tons on Thursday from 999.56 tons on Wednesday.

Gold and silver futures closed at their lowest levels in more than 2-½ years, a day after Federal Reserve Chairman Ben Bernanke said the central bank could move as early as this year to slow the flow of monetary stimulus to the economy.

The dollar advanced to a 2-week high against major currencies on Thursday, and looked likely to extend gains after the Federal Reserve signaled it would begin withdrawing its stimulus programs this year, as US economy improves. The ICE dollar index, which tracks greenback’s performance against six rivals, rose to 81.823 from 81.301 on late Wednesday in North America, and traded as high as 82.14. Fed Chairman Ben Bernanke said US economy was growing fast enough to allow the central bank to trim its $85bn monthly stimulus, with the goal of ending it in mid-2014.

The Eurozone and the International Monetary Fund said Greece is assured of sufficient international aid next month as long as the country presses ahead with its economic-overhaul program. Gold prices overall will continue to remain downside on stimulus withdrawal concerns and outflows from gold exchange traded funds. However short covering can keep prices in range for the day.

Silver tumbled below $20 to trade at 19.745 as precious metals traded on a weak note along with industrial metals, after lackluster Chinese data spooked the markets. Industrial metals prices fell to its lowest level in 20 months; hit by further evidence that the economy of top metals consumer China is slowing down and the U.S. Federal Reserve’s stated intention to begin scaling back stimulus measures later this year.

Copper fell to its lowest level in 20-months, hit by evidence that the economy of top metals consumer China is slowing down. Copper inventories rose for the fifth consecutive day to 643,125 tons – the highest level since July 15, 2003. But it was cancelled warrants that saw the biggest jump, up 48,975 tons to 297,975 tons a fresh all-time high