• Gold and silver daily review (July 07, 2015)

    Gold

    Spot gold prices took a break from weakness in the last three session and traded higher yesterday as safe haven-related buying interest was spurred on the back of expectations that one of the commodities biggest sources of demand China may take more aggressive action following a recent plunge in its stock market.

    Also, the “unexpectedly resolute ‘No’ vote” in Sunday’s referendum in Greece may have increased the chances that the Mediterranean nation will leave the euro zone, supported gains.

    However, sharp gains were capped as US data showed Hedge funds and money managers cut their bullish position in COMEX gold futures and options by more than half in the week ended June 30, ahead of the Greek default on a payment to the IMF. Also, strength in the DX exerted pressure on the yellow metal.

    In the international markets, spot gold prices rose by 0.2 percent yesterday and closed at $1169.7/oz. On the MCX, gold prices declined by 0.1 percent and closed at Rs.26328/10 gms.


    Silver

    Last week, spot silver prices in the international markets traded higher in line with strength in gold prices. However, strengthening dollar acted as a negative factor for silver prices.

    Spot silver prices in the international markets gained 0.4 percent and closed at $15.7/oz. On the MCX, silver prices jumped by 2.2 percent and closed at Rs.36943/kg.


    Outlook

    On an intraday basis, we expect gold prices to trade sideways as hedge funds seem to be the most bearish with net long positioning at lowest since October 2006 and speculators' short positions jumped to more than 9.87 million ounces (283 tonnes) at highest number of bearish bets ever placed.

    While on the other hand, Greek debt crisis will continue to be a dominant factor for precious metals as the referendum says no to austerity measures in turn raising safe haven appeal of the yellow metal.

    On the MCX, precious metals packs are expected to trade sideways today.

    Contributed by Angel Broking
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