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Commodities Precious Metals

Gold and silver daily review (January 07, 2014)

January 7, 2014, Tuesday, 07:40 GMT | 02:40 EST | 12:10 IST | 14:40 SGT
Contributed by Angel Broking


Gold
 
While prices of Gold in dollar terms closed on a flat note on Monday, during the trade, sharp increase in trading volumes was seen in US gold futures. The Comex gold futures contract jumped to a high of $1248/oz yesterday but slipped later and closed at $1237/oz.
 
In intraday trade, prices on the Comex closed about 0.1 percent higher, while on the MCX, the yellow metal declined around 0.6 percent to close at Rs28,974/10gm.
 
Holdings in the SPDR Gold Trust have slipped below 800 tonnes to around 794 tonnes and suggest waning investment demand. However, the appointment of new Federal Reserve Chief Janet Yellen, who is known to be supportive towards stimulus spending, will create positive sentiments ahead of the FOMC meet scheduled for 28-29th Jan’14.
 
 
Silver
 
Silver prices closed on a flat note in the international and domestic markets yesterday. On the Comex, silver futures prices gained around 0.4 percent, whereas on the MCX the contract declined 0.2 percent to close at Rs.45,370/kg.
 
It is seen that holdings of silver in the iShares Silver Trust are falling and this factor to a great extent is capping upside in prices.
 
 
Outlook
 
Data from the CFTC has showed that for the week ended 31st Dec’13, hedge funds and money managers have raised their net long positions in gold and silver futures and options. This along with the joining of the new Fed chief who is known for supporting stimulus spending is likely to be supportive for gold prices.
 
In intraday trade, we expect gold and silver prices to trade higher. While holdings in case of gold and silver are falling, prices may not feel the impact today as sentiments are turning positive on the back of expected increase in Asian demand.

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