Commodities

Gold and silver daily review (October 17, 2012)

Contributed by Angel Broking

Gold

Spot gold pri ces erased earlier gains and settled 0.7 percent higher on reports that Spain might seek for a bailout easing the sovereign debt crisis and as US consumer prices did not rise as expected. This reduced fears of US Federal Reserve curtailing stimulus measures amongst ma rket participants and thus creating positive sentiments. Weakness in the US Dollar Index also supported an upside in the gold prices.

The yellow metal touched an intra-day high of $1,748/oz and closed at $1,747.19/oz on Tuesday. On the MCX, Gold October contract gained 0.2 percent taking cues from firmness in the spot gold. However, sharp rise in the prices of Gold on the MCX were capped due to appreciation in the Indian Rupee and closed at Rs.31,040/10 gms on Tuesday after touching an intra-day high of Rs. 31,060/ 10gms.

Silver

Spot silver prices gained 0.7 percent taking cues from bullishness in the spot gold prices along with gains in the base metals. Additionally, weakness in the DX also acted as a supportive factor for the upside in the silver prices.

The white metal touched an intra-day high of $33.02/oz and closed at $32.93/oz on Tuesday. In the Indian markets, MCX silver prices gained 0.1 percent tracking firmness in the spot silver and closed at Rs. 60,031/kg after touching an intra-day high of Rs.60,218/kg on Tuesday. However, appreciation in the Indian rupee capped sharp fall in the MCX Silver prices in yesterday's session.

Outlook

In the intraday, we expect precious metals to trade on a firm note on the back of positive global market sentiments on optimism that Spain might seek for bailout easing the debt worries of the Euro zone along with weakness in the DX. In the domestic markets appreciation in the Indian rupee will cap sharp rise in the precious metals on the MCX.