Expect downside pressure in precious metals today: Angel

Gold: Prices in the international markets came under pressure and slipped more than 1 percent as strength in the DX coupled with mixed market sentiments added to pressure on prices. But prices on the MCX declined less than that in the global markets as Rupee weakness supported prices. However, the MCX June contract closed below the Rs29,000/10gm mark, indicating a bearish trend. Latest data also suggested that the demand scenario in India is not very supportive. Gold imports in India declined by 32.4 percent in 2011-12 and stood at 655 tonnes from 969 tonnes a year ago. Also imports declined in Q1 of 2012 by 68 percent to 90 tonnes compared to 283 tonnes in Q4 of 2011.

Silver: Taking cues from fall in gold prices and mixed sentiments in base metals complex, Spot silver prices declined by more than 2 percent in yesterday’s trading session. Additionally, strength in the dollar index and drop in US consumer confidence index also exerted downside pressure on silver prices. The white metal touched an intra-day low of $27.73/oz and closed at $27.80/oz in yesterday’s trade. On the domestic front, prices declined by 0.7 percent as depreciation in Indian Rupee cushioned further fall in prices and closed at Rs.53,964/kg after touching an intra-day low of Rs.53,790/kg on Tuesday.

Outlook: Downside pressure in precious metals is expected today as the DX strengthens and as uncertainty with respect to the macroeconomic scenario heightens. Sharp decline on the MCX will be cushioned due to a weaker Rupee.

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