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Commodities Precious Metals

Gold and silver daily review (December 20, 2013)

December 20, 2013, Friday, 05:06 GMT | 00:06 EST | 09:36 IST | 12:06 SGT
Contributed by Angel Broking


Gold

Spot gold prices declined by more than 2 percent yesterday on the back of decline in SPDR gold holdings around 0.5 percent to 808.72 tonnes which is at the lowest level since end of Jan’09. Additionally, strength in the DX acted as a negative factor for the prices.

Further, weak market sentiments due to the QE tapering by the Federal Reserve for $10 billion out of total $85 billion stimulus measures exerted downside pressure on the prices. The yellow metal touched an intra-day low of $1187.1/oz and closed at $1189.60/oz in yesterday’s trading session.

In the Indian markets, prices slipped around 1.8 percent and closed at Rs.28362/10 gms after touching an intra-day low of Rs.28355/10 gms on Thursday. Rupee depreciation restricted sharp downside in prices on the MCX.


Silver

Taking cues from fall in gold prices along with downside in base metals complex, Spot silver prices slipped around 2.4 percent yesterday. Further, weak markets sentiments, strength in the DX along with declining trend in silver ETF holdings acted as a negative factor. The white metal touched an intra-day low of $19.09/oz and closed at $19.20/oz in yesterday’s trade.

On the domestic front, prices dropped around 3.3 percent and closed at Rs.43869/kg after touching an intra-day low of Rs.43629/kg on Thursday.


Outlook

In today’s session, we expect precious metals to trade on a negative note on the back of declining trend in gold and silver ETF’s holdings. Further, US Federal began its QE tapering program for $10 billion out of the total $85 billion stimulus package which will exert downside pressure on precious metals. Additionally, weak market sentiments coupled with stronger DX acted as a negative factor. In the Indian markets, sharp downside in prices will be cushioned due to Rupee depreciation.