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Commodities Precious Metals

Gold and silver daily review (January 27, 2014)

January 27, 2014, Monday, 05:26 GMT | 00:26 EST | 09:56 IST | 12:26 SGT
Contributed by Angel Broking


Gold
 
Spot gold prices gained around 1.2 percent last week on the back of weakness in the DX. Also, gain in SPDR holdings coupled with upbeat market sentiments in the earlier part of the week supported gains in the yellow metal.
 
Further, decline in gold ETF’s holdings managed under SPDR Gold Holdings Trust which slipped to the lowest level since January 2009 in the later part of the week along with mixed market sentiments could not exert downside pressure on prices. The yellow metal touched a weekly high of $1272.7/oz and closed at $1268.64/oz in the last trading session.
 
In the Indian markets, prices rose by 0.9 percent owing to Rupee depreciation and closed at Rs.29519/10 gms after touching a weekly high of Rs.29675/10 gms on Friday.
 
 
Silver
 
Taking cues from fall in base metal prices along with mixed global market sentiments, Spot silver plunged by 2 percent in the last week. Further, silver being an industrial metal as well took cues from unfavourable manufacturing data from China which exerted downside pressure on prices.
 
Further, upside in gold coupled with weakness in the DX could not prevent sharp downside in the prices. The white metal touched a weekly low of $19.61/oz and closed at $19.86/oz on Friday.
 
On the domestic front, prices fell by 1 percent despite Rupee depreciation touching a weekly low of Rs.44112/kg and closed at Rs.44691/kg on Friday.
 
 
Outlook
 
In today’s session, we expect precious metals to trade on higher note due to technical reasons as internationally prices have hovered above the $1250/oz in case of gold and silver prices closing above $20/oz for the last week indicating a positive trend in the commodity. However, on fundamental front a bearish view can still be seen due to declining trend in gold and silver ETF’s holdings. Further, strength in the DX coupled with weak market sentiments will act as a negative factor. Additionally, concerns of QE tapering by the Federal Reserve will exert downside pressure on the prices. In the Indian markets, depreciation in the Rupee will cushion sharp fall on support an upside in the prices.