Gold Suffers As Rupee Continues Its Weak Trend

Gold trading range for the day is 29852-30220. Technically market is getting support at 29587 and below could see a test of 29508 level, And resistance is likely to be seen at 29747, a move above could see prices testing 29828.

Spot Gold prices declined by 0.6 percent due to weak global market sentiments after European Central Bank policy makers did not introduced any immediate steps that could assure investors and boost the economy.

Additionally, strength in the DX also acted as a bearish factor for the Gold prices. The yellow metal touched an intraday low of $1584.49/oz and settled at $1,589.74/oz in yesterday’s session.

Gold traded sharply down falling below psychological support at $1600 an ounce but on MCX market closed flat as rupee weakened in quiet trading after the Federal Reserve refrained from new US monetary stimulus, denting hopes for gains in global risk assets also pressure seen on rupee and Gold after the ECB frustrated market expectations for monetary policy action to manage the debt crisis in the euro zone, sending the US dollar higher. Pushing Gold lower, Draghi stated the bank may undertake bond purchases in order to bring down the "exceptionally high" borrowing costs of stressed euro zone members, but provided no explicit details on how and when these activities may be carried out.

Precious metals witnessed losses, as policy inaction from ECB fuelled doubts regarding the will and the potential of the apex body to resolve the widening debt crisis in the region. In this regard, ECB decided to stay put by leaving the interest rates unchanged and did not provide any concrete signs of bond buying. Market participants were disappointed by the outcome of the ECB policy meet, as it is widely inferred that ECB president Draghi did not live up to the words, or “did not walked the talk”, considering the promise endorsed in his speech during last week.

In the domestic markets Gold prices gained 0.2 percent due to depreciation in the Indian rupee and closed at Rs.29,665/10gms after touching a low of Rs.29590/10 gms on Thursday.

Silver trading patterns and ideas for the day

Silver trading range for the day is 52380-53782. Technically market is getting support at 52642 and below could see a test of 52380 level, And resistance is likely to be seen at 53343, a move above could see prices testing 53782.

Silver prices fell nearly Rs.-267.00 to settled at 52905 level before that saw a rally towards 53519 level but bullion investors continued to unwind bullish bets due to a lack of more aggressive actions by the ECB and US Fed to boost growth.

Spot Silver prices also declined 1.1 percent in yesterday’s session. Further, strength in the DX also added to losses of the white metal prices. Silver prices touched an intraday low of $26.94/oz and closed at $27.10/oz in yesterday’s session.

On MCX Silver prices declined 0.5 percent tracking fall in the spot prices. However, sharp fall in the prices was cushioned in the domestic markets due to depreciation in the Indian rupee.

The bullion market was already under pressure a day after the Fed issued a policy statement that dashed investor hopes for new monetary stimulus, even though it acknowledged that the US economy has lost momentum.