Expect Gold, Silver prices to trade lower

Mumbai-India (Dec 2)  Spot gold price rose to a one month high on Monday reversing from 2 percent losses in the previous session. Spillover support from the surging oil market, technical buy signals and potential for increased Indian imports also supported the rally. Gold received support from the physical markets and from India, the second-biggest gold consumer, which eased curbs on imports on Friday.

The rally followed a thinly traded move lower, viewed by traders as overdone, after Switzerland voted on Sunday against a proposal to boost its gold reserves.

On the MCX, gold prices ended higher by 2.77 percent at Rs.26509/10 gms.

Spot silver prices rose by 6.6 percent to $16.4/oz in tandem with gains in gold prices. Besides, bargain buying at lower levels, weakness in the dollar, and strength in the base metals pack also acted as a positive factor. On the MCX, silver prices rose by 6.36 percent and closed at Rs.36723/kg.

Outlook:  Although, the positive move in the previous trading session might give some boost to prices in today’s session, prices might correct from higher levels. Growth and optimism in the US economy, dollar index trending upwards, rejection of Swiss central bank to boost its gold reserves are all indicating that precious metals pack are headed lower in the coming session. On the contrary, Moody's cut its rating on Japan, might stimulate some gold demand and lift prices.

Source: MoneyControl