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Commodities Precious Metals

Gold and silver daily review (August 11, 2014)

August 11, 2014, Monday, 05:01 GMT | 00:01 EST | 08:31 IST | 11:01 SGT
Contributed by Angel Broking


Gold

Spot gold prices started the week on a low note as bailout agreement to rescue Portugal's largest listed bank and a better tone to the global economy reflected by a higher S&P 500 equities index reduced the safe-haven buying in the yellow metal.

However, over the week prices traded positive after Polish Foreign Minister Radoslaw Sikorski said Russia has gathered military forces at the border with Ukraine either to put pressure on the neighboring country or to enter it.

Safe haven bids rose after NATO said Russia had massed about 20,000 combat-ready troops on Ukraine's border and could use the pretext of a humanitarian mission to invade, its starkest warning yet that Moscow could soon mount a ground assault against its neighbor. In addition, Russian President Vladimir Putin announced Moscow's biggest economic response to Western sanctions, ordering his government to restrict imports of food from countries that have imposed sanctions on Russia.

In the Indian markets, gold prices gained by around 2 percent in the last week and closed at Rs.28604/10 gms.


Silver

Silver prices in the international markets fell by around 1.82 percent diverging from gains in gold prices. Strength in the dollar index, and weakness in copper prices dragged prices further. Escalation of geo-political tensions, and tensions between US and Iraq did not ignite any speculative interest. Profit booking at higher levels and declining speculative interest led to fall in prices. On the MCX, silver prices declined by around 1.91 percent taking cues from weakness in international markets and closed at Rs.43580/kg.


Outlook

On an intraday basis, we expect gold and silver prices to trade on a positive note as geo-political conflict between Russia and Ukraine seem to have eased down a bit while tensions between US and Iraq continue to dominate the financial markets. However, declining investor interest in the ETF holdings as indicated by liquidation in SPDR gold trust will exert downside pressure on prices.

On the MCX, gold and silver prices are expected to trade on a positive note taking cues from strong international markets and rupee weakness.