Commodities

Gold and silver daily review (October 10, 2012)

Contributed by Angel Broking

Gold

Spot gold prices declined 0.6 percent due to weak global market sentiments and thereby rise in the risk aversion amongst the market participants. This strengthened US Dollar Index (DX) thus eroding demand for gold as an alternative investment.

The yellow metal touched an intra-day low of $1,759.94/oz and closed at $1,763.54/oz on Tuesday. On the MCX, Gold October contract ended on a flat note on the back of depreciation in the Indian rupee. Gold prices on the MCX closed at Rs.31,321/10 gms on Tuesday and touching an intra-day low of Rs. 31,267/ 10gms.

Silver

Spot silver prices declined 0.3 percent taking cues from bearishness in the spot gold prices along with weakness in the base metals pack. Additionally, strength in the DX also exerted downside pressure on the silver prices.

The white metal touched an intra-day low of $33.75/oz and closed at $33.79/oz on Tuesday. In the Indian markets, MCX silver prices gained

0.3 percent on the back of depreciation in the Indian rupee and closed at Rs. 61,675/kg after touching an intra-day high of Rs.61,781/kg on Tuesday.

Outlook

In the intraday, we expect precious metals to trade on a bearish note due to weak global market sentiments along with strength in the DX. In the domestic markets depreciation in the Indian rupee will cushion sharp fall in the precious metals on the MCX.