Commodities

Gold and silver daily review (October 16, 2012)

Contributed by Angel Broking

Gold

Spot gold prices declined 1.1 percent as better than expected US economic data might prompt US Federal Reserve to curb stimulus measures. This led to fears amongst market participants and initiated profit booking. Strength in the US Dollar Index also pressurized gold pri ces.

The yellow metal touched an intra-day low of $1,728.75/oz and closed at $1,736.59/oz on Friday. On the MCX, Gold October contract fell 1 percent taking cues from bearishness in the spot gold. However, sharp fall in the prices of Gold on the MCX were cushioned due to depreciation in the Indian Rupee and closed at Rs.30,977/10 gms on Monday after touching an intra-day low of Rs. 30,956/ 10gms.

Silver

Spot silver prices declined 2.2 percent taking cues from weakness in the spot gold prices along with mixed trend in the base metals. Additionally, strength in the DX also acted as a supportive factor for the downside in the silver prices.

The white metal touched an intra-day high of $32.53/oz and closed at $32.69/oz on Monday. In the Indian markets, MCX silver prices fell 2.2 percent tracking bearishness in the spot silver and closed at Rs. 59,959/kg after touching an intra-day low of Rs.59,858/kg on Monday. However, depreciation in the Indian rupee cushioned sharp fall in the MCX Silver prices in yesterday's session.

Outlook

In the intraday, we expect precious metals to trade with negative bias as positive US retail sales data have raised fears amongst participants about the stimulus measures to be discontinued. However, firm global market sentiments along with weakness in the DX might cushion sharp fall in the prices. In the domestic markets appreciation in the Indian rupee will cushion sharp fall in the precious metals on the MCX.