Asian demand may keep Bullion positive amid fall in ETF holdings

Mumba-India (Jan 8)  Spot silver prices dropped by around 0.7 percent today taking cues from mixed base metal prices coupled with strength in the DX. Further, declining trend in iShares silver holdings acted as a negative factor.

Spot silver prices dropped by around 0.7 percent today taking cues from mixed base metal prices coupled with strength in the DX. Further, declining trend in iShares silver holdings acted as a negative factor. MCX Silver prices slipped by 0.4 percent despite Rupee depreciation touching an intra-day low of Rs.45140/kg till 4:00pm IST.

Base metals pack on the LME traded on a mixed note on the back of favourable economic data from the Euro Zone. Also, decline in LME inventories supported gains in prices. Further, mixed market sentiments along with strength in the DX exerted downside pressure on the prices of the base metals. In the Indian markets, base metals traded lower despite Rupee depreciation. 

We expect gold and silver prices to trade higher. While holdings in case of gold and silver are falling, prices may not feel the impact today as sentiments are turning positive on the back of expected increase in Asian demand.