Bullions glitter

Weak US GDP data and weak dollar boost prices Bullion metal prices ended substantially higher on Wednesday, 30 January 2013. Prices rose for second straight day following weaker than expected fourth quarter GDP data at US and a weak dollar. A friendly Federal Open Market Committee meeting statement on Wednesday afternoon also pushed prices higher. Heavy short covering and bargain hunting were featured in gold and silver. Gold for February delivery ended higher by $19.1 or 1.2%, to settle at $1,679.9 an ounce on the Comex division of the New York Mercantile Exchange on Wednesday. The most-active April gold contract added $18.90, or 1.1%, to settle at $1,681.60 an ounce. March silver closed higher by 99 cents, or 3.2%, at $32.18 an ounce on Wednesday. The dollar index, which weighs the strength of the dollar against a basket of six other currencies fell by 0.2% on Wednesday. The big news of the day for the precious metals was a surprisingly weak U.S. economic report. Fourth-quarter U.S. GDP contracted by 0.1% on an annual basis. It is the first U.S. GDP decline in over three years. The market place was expecting the figure to be up 1.0%. The gold and silver markets popped higher immediately following the GDP report, on ideas the weak data will prompt the Federal Reserve to adhere to is very easy money policies presently in place. Then on Wednesday afternoon the two-day FOMC meeting ended with its official policy statement indicating still-tepid U.S. economic growth that suggests the central bank will keep its monetary policy very easy, including continuing to purchase government bonds. Most traders expected the Fed to keep U.S. monetary policy unchanged. However, traders also were watching for any nuances that were included in the Fed statement, which could provide early clues on when the Fed will stop its asset purchases. Overnight, it was reported Euro zone consumer sentiment continues to creep higher, according to the latest figures released from the European Commission Wednesday. The Euro currency continues to rally and hit a fresh 13-month high against the U.S. dollar on Wednesday, amid better investor sentiment toward the European Union and its handling of its sovereign debt crisis. Traders and investors are for the U.S. employment report is out Friday morning. At the MCX, gold prices for April delivery closed higher by Rs 91 (0.3%) at Rs 30,862 per ten grams. Prices rose to a high of Rs 30,927 per 10 grams and fell to a low of Rs 30,621 per 10 grams during the day's trading. At the MCX, silver prices for March delivery closed higher by Rs 1155 (2%) at Rs 59,061/Kg. Prices opened at Rs 58,030/kg and rose to a high of Rs 59,139/Kg during the day's trading.