Kotak Commodities has come out with its report on bullion daily. Highlights: COMEX gold trades rangebound Wednesday after 0.3% gain yesterday Safe haven demand supports gold prices, firmer dollar limits upside The US dollar index trades higher today after 0.4% slide Yesterday Asian equity markets largely up today after gains in US markets yesterday Greek government survived a confidence vote on Wednesday German ZEW economic sentiment index came in at -9.0 in June from 3.1 in May Euro-zone ZEW economic sentiment index dropped to -5.9 from 13.6 in May US existing-home sales dropped 3.8% from April to a seasonally adjusted annual rate of 4.81 million Gold holdings with SPDR ETF were unchanged at 1209.142 tonnes Silver holdings with Ishares ETF were unchanged at 9535.12 tonnes The spot gold silver ratio stood at 42.60 on Tuesday as against 42.79 a day earlier Focus today in Fed’s interest rate meet and BOE minutes Market Analysis: COMEX gold trades higher but in a narrow range on Wednesday after a modest 0.3% gain yesterday which marked its sixth consecutive gain. Gold trades firm holding its recent gains on back of safe haven demand amid increasing concerns about health of Euro-zone economies and US economy. Inflationary concerns in emerging markets have also added to gold’s allure. However a sharp rise in gold has however been kept in a check by relative firmness in the US dollar. Silver- COMEX Silver trades marginally lower on Wednesday after a 0.9% gain yesterday. Silver trades weaker weighed down by weakness in industrial metals and waning investment interest. Continuing strength in gold prices however is lending support. The sharp decline in silver prices from recent highs has been coupled with sharp net redemptions with Ishares ETF which indicates waning investment interest. Silver holdings with Ishares ETF were unchanged yesterday at 9535.12 tonnes. This is the lowest holding with the fund since September 2010 and way below the all time high of 11390 tonnes set earlier this month. Silver has outperformed gold over last few days and this is evident from drop in spot gold silver ratio. The ratio eased to 42.6 yesterday as against 42.79 a day earlier and 42.99 at the start of the week While gold will continue to be the key price determining factor for gold, focus will largely be on trend in ETF buying. A sharp rise in ETF interest is needed for a rally in silver prices. Outlook: Gold- MCX Gold may note some gains tracking cues from international exchange however upside is limited. COMEX gold holds firm as uncertainty persists about debt problems in Euro-zone even as Greek government managed to win the vote of confidence. Also weighing on market expectations are economic concerns relating to the US ahead of Fed’s meet today. While economic uncertainties have raised gold’s safe haven demand, Euro-zone problems have also lent support to the US dollar and this is keeping a check on the upside in gold prices. As for today, focus will be on Fed interest rate meet. While the central bank is likely to keep interest rate unchanged, focus will be on comments relating to the economy and bond purchase program. Gold could come under pressure if Fed reiterates its stance of ending bond purchase program. Support for MCX Gold Aug. contract is seen at Rs.22525 while Resistance is seen at Rs.22735. Silver- MCX Silver may note some decline tracking cues from international exchange however downside may be limited. COMEX Silver trades weaker weighed down by dwindling investment interest and choppiness in industrial metals. However strength in gold prices will limit downside. Support for MCX Silver July contract is seen at Rs.53250 while Resistance is seen at Rs.55750. Disclaimer: The views and investment tips expressed by investment experts on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

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