Commodities

Gold and silver daily review (February 18, 2013)

Contributed by Angel Broking

Gold

Spot gold prices declined 3.5 percent week on week on the signs of recovery in the US, the largest economy of the world after observing positive consumer confidence data showcasing the economy is on the path of recovery. This reduced the safe haven buying by the market participants. Apart from this, lower physical buying by the Asian buyers along with investors adopting a cautious approach due to the G-20 meeting which concluded on Saturday also acted as a bearish factor for the gold prices. Strength in the DX also exerted a downside pressure on the gold prices.

The yellow metal touched a weekly low of $ 1,598.04 /oz and closed at $ 1,609.06 /ounce on Friday. On the MCX, Gold April contract ended 2.2 percent lower taking cues from weakness in the spot gold. Depreciation in the rupee however, cushioned fall in the gold prices on MCX. Gold prices on the MCX closed at Rs. 30,160 /10 gms on Friday after touching a weekly low of Rs. 30,006/ 10gms.

Silver

Spot silver declined 5.25 percent week on week. Silver prices declined taking cues from fall in the spot gold prices and strength in the DX. Contraction in the growth in the Euro zone region also added to the losses. However, positive data from the US and China cushioned fall in the silver prices.

The white metal touched a weekly low of $ 29.65/oz and closed at $ 29.75 per oz on Friday. In the Indian markets, MCX silver prices fell 3.2 percent and closed at Rs. 56,086 /kg on Friday and touched a weekly low of Rs. 55,947 / kg. Fall in the spot silver weighed on the prices of silver on MCX. However, depreciation in the Indian rupee cushioned fall in the silver prices on MCX.

Outlook

In today's session, we expect prices to trade with bearish note due to weak global market sentiments along with strength in the DX. However, improved buying at lower levels and hopes of rise in the Asian demand as Chinese market reopens today might cushion fall in the prices. With US markets remaining close due to President Day, trading participation will remain subdued today. In the domestic market depreciation in the Rupee is expected to support an upside in the prices.