Commodities

Gold and silver daily review (January 03, 2013)

Contributed by Angel Broking

Gold

Spot gold prices gained 0.7 percent due to positive global market sentiments after the fiscal cliff issue of the US got resolved and was passed in the legislation. Weakness in the DX also acted as a supportive factor for the gold prices. However, sharp gains were capped as the investors are also looking ahead for the negotiations on the US debt limit and spending cuts which need to be resolved due in February.

Spot gold prices touched a high of $1,694.7 per oz and closed at $1686.4 per oz in yesterday's session. In the domestic markets, MCX Gold prices traded on a positive note taking cues from the strength in the spot gold prices along with expectation of rise in the import duty of gold in India. The expectation of rise in the gold import duty will therefore increase the landed price of gold in India. These factors acted positive for the upside in the gold prices yesterday. However, increase in the import duty might limit the imports of gold in India and also reduce the demand for the yellow metal in the medium term. However, appreciation in the Indian rupee capped sharp gains in the gold prices on MCX. MCX Gold prices touched an intra-day high of Rs. 31,191 per 10 gms and closed at Rs. 31,042 per 10 gms on Wednesday.

Silver

Spot silver prices ended 2.3 percent higher taking cues from strength in the spot gold prices along with firmness in the base metals prices. Weakness in the DX in most part of the trade yesterday also acted as a supportive factor for the silver prices.

The white metal prices touched a high of $ per oz and closed at $31 per oz. In the domestic markets, silver prices on MCX traded with a positive bias tracking strength in the spot silver prices along with favorable manufacturing data of the nation. However, appreciation in the Indian rupee capped gains on MCX. MCX silver prices touched a high of Rs. 59,580 per kg and closed at Rs.58,938 per kg in yesterday's session.

Outlook

In the intra-day, we expect precious metals to trade higher due to positive global market sentiments. However sharp rise in the prices is likely to be capped due to strength in the DX. Cautious approach might also be adopted by investors as negotiations on the US debt limit and spending cuts has to be discussed. Silver prices might derive trend from the movement in the base metals pack also. Silver prices are expected to remain firm today. In the domestic markets appreciation in the Rupee will cap gains in the precious metals on MCX.