Commodities

Gold and silver daily review (September 07, 2012)

Contributed by Angel Broking

Gold

Spot gold prices increased 0.5 percent due to affirmative statement by the ECB president Mario Draghi that policy makers have agreed on unlimited bond buying program to reduce interest rates for the struggling nations and fight speculation of a breakup of Euro. Further positive US economic data of jobless claims also added to the gains in the gold prices. Additionally weakness in the US Dollar Index DX also supported an upside in the gold prices.

The yellow metal touched a high of $1,695/oz and closed at $1,700.9/oz in yesterday's session. On the MCX, Gold October contract increased by 0.1 percent tracking firmness in the spot gold prices. However, appreciation in the Indian rupee capped sharp gain in the gold prices. Gold prices on the MCX closed at Rs.31,467/10 gms on Thursday after touching a historical high of Rs.31,818/10 gms yesterday.

Silver

Taking cues from rise in gold prices and weakness in the DX, Spot silver prices gained by 1.1 percent in yesterday's trade. However, sharp upside in the silver prices was capped on the back of weakness in the copper prices.

The white metal touched an intra-day high of $32.3/oz and closed at $32.10/oz in yesterday's trading session. In the Indian markets, prices gained by 2.3 percent on account of depreciation in the Indian Rupee and closed at Rs. 62,339/kg after touching an intra-day high of Rs.63,430/kg on Thursday.

Outlook

In today's session we expect precious metals to with upward bias on the back of strength in the global market sentiments along with weakness in the DX. Additionally, positive statement by the ECB president that policy makers have agreed to the unlimited bond buying plan to reduce the borrowing costs will support upside in the prices. In the Indian markets appreciation in the Rupee will cap sharp rise in the prices.