Commodities

Gold and silver daily review (February 12, 2013)

Contributed by Angel Broking

Gold

Spot gold prices continued to extend losses of the previous trading session and ended 1.1 percent lower on Monday. Prices witnessed selling pressure due to weak physical demand along with renewed debt worries of the Euro zone region with policy makers discussing over the bailout of Cyprus and Greece and political turmoil created in Spain after corruption allegation on the Prime Minister Mariano Rajoy.

The yellow metal touched an intra-day low of $ 1643.24 per ounce and closed at $ 1649.36 per ounce on Monday. On the MCX, Gold April contract ended 0.5 percent lower taking cues from fall in the spot gold prices. Depreciation in the Indian rupee however, cushioned fall in the MCX gold prices. Gold prices on the MCX closed at Rs. 30,640/10 gms on Monday after touching an intra-day low of Rs. 30,583/ 10gms.

Silver

Taking cues from fall in the Spot gold prices, silver prices also witnessed a decline and ended 1.3 percent lower in yesterday's session. Bearishness in the base metals also exerted downside pressure on the silver prices. Strength in the DX also weighed on the prices of silver.

The white metal touched an intra-day low of $30.79/oz and closed at $ 31.0 per oz on Monday. In the Indian markets, MCX silver prices ended 0.9 percent down and closed at Rs. 57,661/kg on Monday and touched an intra-day low of Rs. 57,542/ kg. Weakness in spot silver led prices to correct in the MCX silver too. Depreciation in the Indian rupee however, cushioned fall in the silver prices on MCX.

Outlook

In the intra-day we expect, precious metals to trade with negative bias taking cues from lower physical buying along with worries amongst the market participants over the renewed concerns in the Euro region. Further investors are waiting for a meeting of G20 finance ministers and central bankers which are expected to set the tone of the Forex markets especially the euro. This is also causing risk aversion amongst the market participants. However, weakness in the DX might cushion fall in the prices. In the domestic market, appreciation in the rupee might push prices downwards on MCX.