Commodities

Gold and silver daily review (February 04, 2013)

Contributed by Angel Broking

Gold

Spot gold prices gained 0.5 percent week on week. Gold prices rose on account of favorable data from the US and the Euro region along wit h weakness in the DX. US nonfarm payrolls for the month of January 2013 were lower than expectations but the job gains in the previous two months (November & December 2012) were higher than earlier reported indicating that the economy is on the path of recovery erasing concerns of contraction in the growth in the fourth quarter. US ISM manufacturing activity and consumer sentiment also witnessed a boost thereby resulting into rise in the risk appetite for the gold.

Further, optimism that US Federal Reserve would continue with its monetary easing program until 2014 also added to the gains in the gold prices. US Federal Reserve said that policy makers would keep with their bond buying program until jobs market improves substantially.

The yellow metal touched a weekly high of $1,683.39/oz and closed at $ 1,666.54 per ounce on Friday. On the MCX, Gold February contract ended 1.29 percent lower due to appreciation in the rupee. Sharp fall in the prices were cushioned due to strength in the spot gold prices. Gold prices on the MCX closed at Rs. 29,938/10 gms on Friday after touching a weekly low of Rs. 29,794/ 10gms

Silver

Spot silver gained 2.1 percent week on week. Silver prices traced rise in the gold prices along with strength in the base metals pack. Weakness in the DX also supported an upside in the silver price. Positive data from the US, Euro zone region and China also acted as a supportive factor for the silver prices

The white metal touched a weekly high of $ 32.23/oz and closed at $ 31.80/oz on Friday. In the Indian markets, MCX silver prices gained 0.4 percent and closed at Rs. 58,502/kg on Friday and touched a weekly high of Rs. 59,139/ kg. Rise in the spot silver prices supported an upside in the silver prices on MCX. However, appreciation in the Indian rupee restricted gains in the silver prices on MCX.

Outlook

In today's session, we expect precious metals to trade higher due to positive global market sentiments along with weakness in the DX. In the domestic markets, appreciation in the rupee is likely to act as bearish factor for the precious metals on MCX.