Commodities

Gold and silver daily review (February 20, 2013)

Contributed by Angel Broking

Gold

Spot gold prices continued to extend losses of the previous day and ended 0.3 percent lower on Tuesday. Signs of global recovery dented the safe haven buying of the yellow metal which weighed on the prices. Weakness in the DX however, cushioned fall in the gold prices in yesterday's session.

The yellow metal touched an intra-day low of $1,600.34/oz and closed at $1,604.02/ounce on Tuesday. On the MCX, Gold April contract ended 0.4 percent lower taking cues from trend in the spot gold prices. Gold prices on the MCX closed at Rs.30, 052/10 gms on Tuesday after touching an intra-day low of Rs. 29,977/ 10gms.

Silver

Taking cues from bearishness in the spot gold prices, spot silver prices also ended on a bearish note. Weakness in the base metals pack also acted as a bearish factor for the silver prices. Weakness in the DX however cushioned fall in the spot silver prices.

The white metal touched an intra-day low of $ 29.2/oz and closed at $ 29.4 per oz on Tuesday. In the Indian markets, MCX silver prices fell 1.9 percent and closed at Rs.55,171/kg on Tuesday and touched a intra-day low of Rs. 54872/ kg. Silver prices on MCX traced fall in the spot silver prices.

Outlook

In the intra-day, we expect precious metals to trade with a bearish note on the back of reduced demand from the Asian buyers along with signs of global recovery which is reducing safe haven buying of the yellow metal. Investors might also adopt a cautious approach ahead of the FOMC meeting minutes. Weakness in the DX along with buying at lower levels might cushion fall in the yellow metal. In the domestic market, appreciation in the rupee is expected to exert downside pressure on the gold prices.