Commodities

Gold and silver daily review (September 10, 2012)

Contributed by Angel Broking

Gold

Spot gold prices gained by 2.7 percent due to affirmative outcome of the European Central Bank (ECB) meeting to contain the regions debt. Further, more than expected decline in the US nonfarm payrolls raised speculation that US policy makers might hint for stimulus measures in the upcoming Federal Open Market Committee meeting on September 12-13 to boost the economic growth. Weakness in US Dollar Index (DX) also added to the gains of the gold prices.

The yellow metal touched a high of $1,741.30/oz and closed at $1,736/oz on Friday. On the MCX, Gold October contract increased 1.8 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.31,896/10 gms on Friday after touching a historical high of Rs.32,000/10 gms in the last week.

Holdings in the SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, increased by 0.28 percent and stood at 1293.14 tonnes till September 07, 2012 as against 1289.52 tonnes till August 31, 2012

Silver

Taking cues from rise in gold prices and strength in the base metals pack Spot silver prices gained 6.2 percent in the last week. Weakness in the DX also added to the gains of spot silver prices.

The white metal touched an intra-day high of $33.71/oz and closed at $33.65/oz in the last week. In the Indian markets, MCX silver prices gained by 9.7 percent taking cues from strength in the spot prices and closed at Rs. 64,060/kg after touching weekly high of Rs.64,170/kg on Friday. Appreciation in the Indian rupee capped sharp gains on the MCX.

On a weekly basis, holdings in the iShares Silver Trust, increased by 0.13 percent to 9,734.23 tonnes till September 07, 2012 from previous level of 9,721.33 tonnes on 31st August 2012

Outlook

In today's session we expect precious metals to with sideways with upward bias on the back of positive global market sentiments along with weakness in the DX. Expectation that global central bankers might take stimulus measures soon will also support an upside in the prices. In the Indian markets appreciation in the Rupee will cap sharp rise in the prices.