Commodities

Gold and silver daily review (January 22, 2013)

Contributed by Angel Broking

Gold

Trading activity in the spot gold remained subdued on the observance of the Martin Luther Day. In the domestic markets, gold prices traded on a firm not e as the government raised the import duty on gold to 6 percent from 4 percent in order to curtail the widening current account deficit. Rise i n the import duty causes the landed cost of the metal in the domestic to rise thereby increasing the prices. The finance ministry officials also said that the duties would be reviewed if there are changed in the gold imports.

The yellow metal touched an intra-day high of $1,691.1/oz and closed at $1,686.6/oz in yesterday's trading session. On the MCX, Gold February contract gained by 0.5 percent on the back of increase in the Indian Rupee and mild depreciation in the Indian rupee in the later part of the day and closed at Rs.30,757/10 gms after touching an intra-day high of Rs. 30,847/10 gms on Monday.

Silver

Taking cues from strength in the gold prices spot silver prices also ended 0.5 percent higher. Weakness in the base metals pack restricted sharp gains in the spot silver prices.

The white metal touched an intra-day high of $32.04/oz and closed at $32/oz on Friday. On the domestic front, prices ended on a flat note taking cues from strength in the spot silver prices while appreciation in the currency exerted downside pressure on the silver prices on MCX.

Prices of silver closed at Rs.59,432/kg after touching an intra-day low of Rs. 59,322/kg in yesterday's trading session.

Outlook

From the intra-day perspective, we expect prices to trade on a positive note on the back of rise in risk appetite in the global market sentiments along with weakness in the DX. Apart from this stimulus measures announced by the Bank of Japan is also expected to support an upside in the precious metals. In the domestic markets, gold prices are expected to trade with an upward bias due to rise in the import duty on gold. However, appreciation in the Indian Rupee will cap sharp gains in the prices on the MCX.