Commodities

Gold and silver daily review (October 15, 2012)

Contributed by Angel Broking

Gold

Spot gold prices declined 1.5 percent week on week taking cues from we ak global market sentiments resulting worries of global slowdown as IMF cuts the global growth forecast for 2012. This caused rise in the risk aversion amongst market participants and increased the demand for the low yield ing currency that is US Dollar Index (DX). Strength in the DX pressurized gold prices.

The yellow metal touched a weekly low of $1,751.84/oz and closed at $1,753.75/oz on Friday. On the MCX, Gold October contract ended 0.1 percent lower taking cues from weakness in the spot prices. However, depreciation in the Indian rupee cushioned sharp fall in the MCX gold prices in the last week. Gold prices on the MCX closed at Rs.31,276/10 gms on Friday after touching a weekly low of Rs. 30,659/ 10gms.

Holdings in the SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, surged 0.5 percent and stood at 1340.52 tonnes till October 12, 2012 as against 1333.44 tonnes till October 05, 2012.

Silver

Spot silver prices declined 3 percent week on week taking cues from weakness in the spot gold prices along with bearishness in the base metals pack. Additionally, strength in the DX also exerted downside pressure for the silver prices.

The white metal touched a weekly low of $33.02/oz and closed at $33.20/oz on Friday. In the Indian markets, MCX silver prices traced bearishness in the spot prices fell 0.6 percent week on week. However, depreciation in the Indian rupee cushioned sharp fall in the silver prices on MCX. Silver prices on MCX closed at Rs. 61,346/kg after touching a weekly low of Rs.61,043/kg on Friday.

On a weekly basis, holdings in the iShares Silver Trust, declined 0.25 percent on October 12th 2012 at 9894.58 tonnes as compared to 9920 tonnes in the week ended 05th October 2012

Outlook

In the intraday, we expect precious metals to trade on a bearish note on the back of 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.