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Commodities Precious Metals

Gold and silver daily review (February 03, 2014)

February 3, 2014, Monday, 05:07 GMT | 00:07 EST | 09:37 IST | 12:07 SGT
Contributed by Angel Broking


Gold
 
Spot gold prices declined around 2 percent in the last week on the back of weak market sentiments after QE tapering of $10 billion by the Federal Reserve. Further, strength in the DX exerted downside pressure on the prices.
 
However, sharp downside in the prices was prevented due to rise in gold ETF’s holdings managed under SPDR Gold Holdings Trust by 0.3 percent to 793.16 tonnes. The yellow metal touched a weekly low of $1237.94/oz and closed at $1243.20/oz on in last trading session of the week.
 
On the domestic bourses, the near-month gold contract slipped around 0.2 percent and closed at Rs.29462/10gm on Friday after touching a weekly low of Rs.29252/10gm. Depreciation in the Rupee prevented sharp downside in the prices on the MCX.
 
 
Silver
 
Taking cues from fall in gold prices along with downside in base metals complex, Spot Silver prices dropped around 4 percent in the previous week. Further, strength in the DX exerted downside pressure on the prices.
 
Additionally, rise in silver ETF’s holdings by 0.7 percent to 10095.06 tonnes could not provide respite to fall in the prices. The white metal touched a weekly low of $18.97/oz and closed at $19.10/oz in last trade of the week.
 
In the Indian markets, the near-month silver futures contract on the MCX fell by more than 3 percent and closed at Rs.43309/kg on Friday after touching a low of Rs.43080/kg in the prior week. Depreciation in the Rupee prevented sharp downside in the prices on the MCX.
 
 
Outlook
 
Over the trade, we expect precious metals to trade on a negative note as a result of weak market sentiments after QE tapering of $10 billion by the Federal Reserve. Further, strength in the DX will exert downside pressure on the prices. However, sharp downside in the prices will be prevented due to rise in gold and silver ETF holdings. In the Indian markets, Rupee depreciation will cushion sharp downside pressure on the prices.