MCX precious metals pack may trade lower

Mumbai-India (Jan 5)  Spot gold prices traded lower last week on stronger dollar and falling oil prices which is reducing the inflation hedge appeal for the yellow metal. Investor holdings in exchange-traded funds backed by gold last week were the lowest since 2009 suggesting falling investment demand for the yellow metal.

The impact of a stronger dollar was partially offset by demand from investors worried about tensions in Russia and political uncertainty in Greece.

Bullion was on track for a small fall this year after a turbulent 2013, when prices fell by a third following 12 years of gains. In the international markets, spot gold prices declined marginally by 0.5 percent and closed at $1188.68/oz.

On the MCX, gold prices declined by 1.27 percent and closed at Rs.26730/10 gms.

Silver

Last week, spot silver prices declined in tandem with fall in gold prices Strength in the dollar index coupled with weakness in Nickel and Copper prices also acted as a negative factor. Spot silver prices in the international markets declined by 1.75 percent and closed at $15.73/oz.

On the MCX, silver prices declined by 2.89 percent and closed at Rs.36235/kg.

Outlook

On an intraday basis, we expect the precious metals pack to continue its weakness from the previous session. Profit booking at higher levels, strength in the dollar index, outflows from the SPDR gold trust will act as a negative factor. While tensions between Russia and the US and uncertainty over Greece elections will lift the safe haven demand for the metal.

On the MCX, the precious metals pack is expected to trade lower.

Source: MoneyControl