Gold prices traded in a ranged manner for larger part of session. While Spot market prices remained stable even during the US session, we saw that huge mercurial trade in the futures markets. Overall we maintain our moderate bullish bias into the commodity in the short-term with the prices taking further support out of the mixed to weaker US and European equity indices globally.
In the Indian context, we have seen heavy movement as per as the calendar spread market is concerned yesterday. The spread between the February and April month contract suddenly slipped to near Rs 575 from over Rs 700 per 10/Gms last week. We had earlier recommend buying the spread and booked partial profits near Rs 750 levels. With the speculation in local markets increasing regarding tax ease by the GoI and also rising April month futures over near month has led towards reduction in backwardation. We advice traders to close the open positions in the spread near cost, if any. Our buying level was around Rs 450-500. Overall, we have a bullish view into the commodity for small targets in Intra-day.
GLOBAL MARKET ANALYSIS: We start with some news. Janet Yellen was confirmed by the US senate on Monday to lead the Central Bank. This morning Asian markets are trading mixed while the US posted a negative close over night. From commodities, gold and silver prices are trading higher at $1241.30 and $20.21 respectively. Robust Asian demand is keeping the precious metals up.
The premium for immediate delivery in China was about $22.35 an ounce, compared with last month’s average of$15.35. For the day we continue to hold a bullish view on gold while silver may also follow the same trend. From the economic data front, we have loads from Germany, UK and euro-zone in the form of retail sales, PPI and CPI. We believe these data might develop marginal volatility in the assets prices. We do not have any major economic data from the US today.