Commodities

Gold and silver daily review (January 23, 2013)

Contributed by Angel Broking

Gold

Spot gold prices continued to extend gains of the previous day on account of positive global market sentiments after Bank of Japan announced stimulus measures to spur growth in the economy. Additionally, weakness in the DX also supported prices to remain firm. In the domestic markets, prices settled on a flat note. Bank of Japan announced open ended asset purchase program of about 3 trillion yen ($146 billion) per month which will commence from January 2014 and has also set the target of inflation at 2 percent.

The yellow metal touched an intra-day high of $1,695.76/oz and closed at $1,691.6/oz in yesterday's trading session. On the MCX, Gold February contract ended on a flat note. Depreciation in the Indian Rupee along with imposition of import duty on gold from January 22, 2012 also kept the prices of the yellow metal supported. MCX gold prices closed at Rs.30,772/10 gms after touching an intra-day high of Rs. 30,818/10 gms on Tuesday.

Silver

Taking cues from strength in the gold prices spot silver prices also ended 0.6 percent higher. Weakness in the DX along with strength in the base metals pack also acted as a supportive factor for the spot silver prices.

The white metal touched an intra-day high of $32.34/oz and closed at $32.2/oz on Tuesday. In the domestic market, prices ended 0.3 percent higher taking cues from strength in the spot silver prices and depreciation in the rupee. Prices of silver closed at Rs.59,617/kg after touching an intra-day high of Rs. 59,720/kg in yesterday's trading session.

Outlook

In today's session, 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. Stimulus measures announced by the Bank of Japan are also expected to support an upside in the precious metals. In the domestic markets, gold prices are expected to trade with an upward bias tracking firmness in the spot gold along with depreciation in the Indian Rupee will cap sharp gains in the prices on the MCX.