Commodities

Gold and silver daily review (September 05, 2012)

Contributed by Angel Broking

Gold

Spot gold prices increased around 0.2 percent due to expectation that US Federal Re serve might adopt stimulus measures soon viewing weak economic data from the US yesterday. This will increase the demand for the yellow metal as hedge inflation. However strength in the US Dollar Index DX capped sharp gains in the gold prices.

The yellow metal touched a high of $1,698.45/oz and closed at $1,694.40/oz in yesterday's session. On the MCX, Gold October contract increased 0.5 percent tracking firmness in the spot gold prices and depreciation in the Indian rupee. Gold prices on the MCX closed at Rs.31,449/10 gms on Tuesday after touching a historical high of Rs.31,487/10 gms in yesterday's session.

Silver

Taking cues from rise in gold prices, Spot silver prices gained 0.7 percent in yesterday's trade. However, strength in the DX along with weakness in the base metals pack capped sharp gains in the silver prices. The white metal touched an intra-day high of $32.4/oz and closed at $32.10/oz in yesterday's trading session.

In the Indian markets, prices gained by 1.5 percent taking cues from strength in the spot gold prices along with depreciation in the Indian Rupee and closed at Rs.60,606/kg after touching an intra-day high of Rs.60,784/kg on Tuesday.

Outlook

In today's session we expect precious metals to trade range bound on the back of weak global markets along with strength in the DX.

While on the other hand, after observing weak economic data from the US economy US Federal Reserve might adopt stimulus measures soon. If monetary easing is adopted it would increase the demand for the gold as a hedge against inflation. In the Indian market depreciation in the Rupee might support an upside in the precious metals on MCX.