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Commodities Precious Metals

Gold and silver daily review (December 04, 2013)

December 4, 2013, Wednesday, 16:21 GMT | 11:21 EST | 20:51 IST | 23:21 SGT
Contributed by Angel Broking


Gold

Gold prices came under pressure yesterday and fell to the lowest since July’13 as the fear associated with the beginning of the QE taper added to downside pressure on prices. Economic data ahead in the week is likely to show an improvement in the US job market scenario, which is a crucial indicator for the Federal Reserve in its course of deciding the tapering of the QE program.

Additionally, data at the start of the week also showed that manufacturing in the US grew at the fastest pace in more than two years. Gold prices on the Comex slipped to a low of $1214.60/oz, to lowest since 8th July’13 and gained marginally around 0.1 percent in intraday trade yesterday.

On the domestic front, prices gained around 1 percent due to Rupee depreciation and closed at Rs.30368/10 gms after touching an intra-day high of Rs.30394/10 gms on Tuesday.


Silver

Taking cues from fall in gold prices, silver also came under pressure and fell more than 3 percent on Comex futures. Falling below the $20/oz mark, the white metal showed vulnerability towards the QE taper decision and any further positive US economic indicators could add to further downside in the commodity.

On the MCX, prices slipped around 0.4 percent and closed at Rs.42843/kg after touching an intra-day low of Rs.42600/kg on Tuesday.


Outlook

In today’s session, we expect precious metals to trade on a negative note in international markets on the back of declining trend in gold and silver ETF’s holdings. Further, strength in the DX coupled with weak market sentiments will add downside pressure in the prices. Additionally, concerns regarding the QE tapering by the Federal Reserve will act as a negative factor.

In the Indian markets, depreciation in the Rupee will prevent sharp downside movement in the prices.