Nirmal Bang advices to sell precious metals on rally

Precious metals prices edged higher on Friday as market sentiment improved after Russia revealed it had boosted its bullion reserves in June, but losses in equities and crude oil amid uncertainty over the euro zone debt crisis limited further gains.

Holdings in the SPDR Gold Trust, the world's largest gold-backed exchange traded fund, stood at 1254.64 tonnes by July 20, down by 2.41 tonnes from the previous business day.

Holdings in the world's largest silver backed exchange-traded fund iShares Silver Trust stood at 9696.71 tonnes by July 20, unchanged from the previous business day.

A big shift is needed in people's social and cultural attitudes towards gold to cut its demand, which in turn will help ease the current account situation, Reserve Bank deputy governor KC Chakrabarty has said. "90% of the gold demand is jewellery or to offer to God. Both have to stop,"
Chakrabarty said

Hedge funds and money managers increased their net long position in U.S. gold futures and options in the week to July 17, as a rise in bullion prices prompted speculators to add bullish bets.They raised their net longs in gold by 3,991 to 92,964 lots in the period, data from the Commodity Futures Trading Commission (CFTC)'s Commitments of Traders showed.

Precious metals prices are trading lower on COMEX today. A stronger dollar overseas is likely to pressurize prices of precious metals. Selling on rise is recommended for the day.

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