Commodities

Gold and silver daily review (September 03, 2012)

Contributed by Angel Broking

Gold

Spot gold prices increased around 1.2 percent in the last week on the back of weakness in the US Dollar Index (DX). Also, statement from Fed Chairman Ben Bernanke that he won't rule out for stimulus measures to boost the economy acted as a supportive factor for the prices. However, further upside in the prices was capped as a result of rise in risk aversion in the global markets.

The yellow metal touched a high of $1,692.71/oz in the last week and closed at $1,690.54/oz in the last trading session of the week. On the MCX, Gold October contract increased by more than 1 percent on account of depreciation in the Indian Rupee and closed at Rs.31,220/10 gms on Friday after touching a high of Rs.31,231/10 gms in the last week.

Holdings in the SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, increased by 0.2 percent and stood at 1289.52 tonnes till August 31, 2012 as against 1286.50 tonnes for the week ending on August 24, 2012.

Silver

Taking cues from rise in gold prices along with weakness in the DX, Spot silver prices increased around 3 percent during the last week. However, further upside in the prices was restricted on the back of decline in the base metals group.

The white metal touched a high of $31.76/oz during the week and closed at $31.69/oz in the last trading session of the week. In the Indian markets depreciation in the Indian Rupee supported upside in the prices and closed at Rs.58,362/kg on Friday after touching a high of Rs.58,517/kg in the last week.

On a weekly basis, holdings in the iShares Silver Trust, declined by 1.0 percent to 9721.33 tonnes on 31st August 2012 from previous level of 9820.81 tonnes on 24th August 2012.

Outlook

In today's session we expect precious metals to trade range bound with bullish tone on the back of mixed global markets along with weakness in the DX. Additionally expectations of stimulus measures from Federal Reserve coupled with speculation that European leader might take steps to solve Euro Zone debt crisis is likely to support an upside in the precious metals.