Commodities

Gold and silver daily review (January 24, 2013)

Contributed by Angel Broking

Gold

Spot gold prices declined 0.4 percent in yesterday's session as the US debt ceiling was postponed till May 19 reducing the demand for the safe haven asset. Further, signs of improvement of global recovery also reduced the demand for the safe haven investments. Weakness in the DX in most part of the trading session however restricted sharp fall in the gold prices.

The yellow metal touched an intra-day low of $1682.84/oz and closed at $1685.14/oz in yesterday's trading session. On the MCX, Gold February contract fell by 0.3 percent taking cues from fall in the spot gold prices along with appreciation in the rupee and closed at Rs. 30,691/10 gms after touching an intra-day low of Rs. 30,653/10 gms on Wednesday.

Silver

Spot silver prices gained 0.2 percent on account of strong inflow into the silver backed exchange traded funds. Weakness in the DX in most part of the trade also acted as a supportive factor for silver prices. Strength in the base metals pack (except copper) also supported an upside in the silver prices.

The white metal touched an intra-day high of $32.44/oz and closed at $32.24/oz on Wednesday. On the domestic front, prices ended 0.4 percent higher taking cues from strength in the spot silver prices while appreciation in the currency restricted sharp gains in the silver prices on MCX. Prices of silver closed at Rs. 59,865/kg after touching an intraday high of Rs. 59,974/kg in yesterday's trading session.

Holdings in the ishares silver trust, the world's largest silver ETF increased to 10,689.86 tonnes as on January 24, 2013 an increase of 5.99 percent as compared to 10,084.96 tonnes as on 1st January 2013.

Outlook

In today's' session, we expect gold prices to trade with an weak note due to bearish global market sentiments along with strength in the DX. Silver prices on the other hand might remain firm due to improved buying in the ishares trust ETF. In the domestic markets depreciation in the currency is expected to cushion fall in the prices of the precious metals.