Commodities

Gold and silver daily review (September 12, 2012)

Contributed by Angel Broking

Gold

Spot gold prices gained by 0.4 percent on the back of positive global market sentiments ahead of the German constitution court hearing on September 12, 2012 and Federal Reserve policy meeting on September 12-13. Weakn ess in the DX also added to the gains in the gold prices. Expectation that US Federal Reserve and Chinese government might take stimulus measures to boost the economy created positive market sentiments in yesterday's session.

The yellow metal touched an intra-day high of $1,737.80/oz and closed at $1,731.6/oz in yesterday's trading session. On the MCX, Gold October contract declined by 0.1 percent and closed at Rs31,876/10 gms after touching an intra-day low of Rs.31808/10 gms on Tuesday. Appreciation in the Indian Rupee led MCX gold prices to witness correction in yesterday's trade.

Silver

Taking cues strength in gold prices along with weakness in the DX, Spot silver prices increased 0.6 percent in yesterday's trading session. Upside in the base metals complex also added to the gains of the silver prices.

The white metal touched an intra-day high of $33.81/oz and closed at $33.49/oz on Tuesday. In the Indian markets appreciation in the Rupee led prices to decline 0.3 percent and closed at Rs.63,804/kg after touching an intra-day low of Rs.63,638/kg in yesterday's trading session.

Outlook

In today's session, we expect precious metals to trade with positive bias due to upbeat global market sentiments ahead of US Federal Reserve meeting September12-13, 2012 and the German constitutional court ruling on September 12,2012. Optimism that stimulus measures might be taken by the US is expected to create positive market sentiments. Weakness in the DX will also act as a supportive factor for the precious metals. In the Indian markets appreciation in the Rupee will cap sharp gains in the prices.