Commodities

Gold and silver daily review (September 14, 2012)

Contributed by Angel Broking

Gold

Spot gold prices increased 2.1 percent on the back of upbeat global market sentiments after US Federal reserve announced that it will expand its holdings of long term securities with open ended purchases of $40 billion mortgage based securities per month to boost the economic growth of the nation. The FOMC also said it would probably hold the federal funds rate near zero "at least through mid-2015."

The yellow metal touched a high of $1,772.26/oz and closed at $1,766.29/oz on Thursday. On the MCX, Gold October contract also gained 1.4 percent tracking spot gold prices. Further, deprecation in the Indian rupee also added to the gains of gold prices. Gold prices on the MCX closed at Rs.32,326/10 gms on Thursday after touching a historical high of Rs.32,421/10 gms.

Silver

Spot silver prices gained 4.1 percent in yesterday's session taking cues from strength in the gold prices along with firmness in the base metals pack. Weakness in the DX also acted as a supportive factor for the gold prices in yesterday's session. Gains were witnessed on the back of announcement of QE3 by the US Federal Reserve in the Federal Reserve Open Market Commission meeting (FOMC) held yesterday.

The white metal touched an intra-day high of $34.78/oz and closed at $34.68/oz on Thursday. In the Indian markets, MCX silver prices gained 3.2 percent taking cues from strength in the spot prices along with depreciation in the Indian rupee and closed at Rs. 65,292/kg after touching a high of Rs.65,723/kg in yesterday's session.

Outlook

In today's session, we expect precious metals to trade with positive bias due to upbeat global market sentiments and weakness in the DX. Also announcement by US Federal Reserve Chairman Ben S. Bernanke of buying $40 billion long term Mortgage Backed Securities (MBS) every month will support an upside in the prices. In the Indian markets appreciation in the Rupee will cap sharp gains in the MCX prices.