Commodities

Gold and silver daily review (October 30, 2012)

Contributed by Angel Broking

Gold

Spot gold prices swung between gains and losses and finally settled 0.1 percent on the back of rise in the risk aversion amongst market participants over worries that better economic data from the US economy might prompt US Federal Reserve to adjust the stimulus measures.

Further, investors are awaiting the US elections and the fiscal cliff issues and therefore following a wait and watch stance. Strength in the DX also exerted a downside pressure on the gold prices on Monday.

The yellow metal touched an intra-day low of $1,705.39/oz and closed at $1,708.84 on Monday. On the MCX, Gold October contract gained 0.2 percent owing to depreciation of the Indian Rupee. Gold prices on the MCX closed at Rs.31,094/10 gms after touching an intra-day high of Rs. 31,143/ 10gms.

Silver

Spot silver prices declined 0.9 percent lower taking cues bearishness in the spot gold prices and weakness in the base metals pack. Strength in the DX also exerted a downside pressure on the silver prices.

The white metal touched an intra-day low of $31.65/oz and closed at $31.76/oz on Monday. In the Indian markets, MCX silver prices fell 0.4 percent and closed at Rs. 59,392/kg on Monday after touching an intraday low of Rs.59,302/kg. However, depreciation in the Indian rupee cushioned sharp fall in the MCX silver prices.

Outlook

In today's session we expect precious metals to trade on a bearish note on the back of mixed global market sentiments along with strength in the DX. Doubts amongst market participants that positive data from the US economy might prompt US Federal Reserve to adjust stimulus measures along with worries of fiscal cliff issues may exert downside pressure on the precious metals. In the Indian markets, depreciation in the Indian rupee is expected to cushion sharp fall in the gold prices on MCX.