Expect gold prices to trade higher

New York (Feb 23)  On Monday, spot gold prices declined by 1.58 percent to close at $1208.4 per barrel as the dollar strengthened and investor appetite for risk increased, but the metal remained above $1,200 an ounce after a rally that pushed prices to one-year highs this month.

Concern over financial instability and the re-pricing of expectations for U.S. interest rate rises, has helped gold outperform most assets so far this year with a 15 percent gain.

Investor sentiment remained largely bullish and was evident in fund flows. SPDR Gold Trust, the world's top gold exchange-traded fund, on Friday recorded the biggest single-day inflow since August 2011. The fund's inflows since the beginning of the year have already surpassed the outflows for the whole of 2015.

ON the MCX, gold prices declined by 1.86 percent to close at Rs.28966 per 10 gms.

Silver

Spot silver prices declined by 1.43 percent to close at $15.2 per ounce in line with decline in gold prices and stronger dollar. However, strong base metals pack cushioned sharp downfall in silver prices.

ON the MCX, silver prices declined by 1.43 percent to close at Rs.36981per kg.

Outlook

ON an intraday basis, we expect gold prices to trade higher as international markets are trading higher by more than one percent. Uncertainty across financial markets is leading investors for flight towards safe haven while stronger dollar is exerting downside pressure on gold prices.

On the MCX, gold prices are expected to trade higher in line with trends in international markets.

Source: MoneyControl