MCX Gold prices may rise on rupee depreciation: Karvy

Gold: This morning, gold is trading at $1611, staying mostly unchanged from its previous close. We expect the trend to continue today as well. The market has been carrying on with the Cyprus uncertainty, causing gold to take on a safe haven appeal. We do not foresee any change in the current stance; in fact, there are no counterpoints to erase gold’s current bullish trend. Although economic data turned out to be better for the US last night, there was no negative impact noticed on gold. However, the FOMC’s decision due tonight is the key point that is due tonight and the markets would definitely be keeping an eye on the same in order to figure out which markets may trade cautiously, anticipating unexpected comments from the Fed’s Ben Bernanke. However, if inflation were a matter of concern in the US, (holding up near 2percent) any discussion about inflationary growth would push gold higher as a hedge against inflation.
Another point of discussion would be that once the euro is away from the worry about Cyprus, the currency would start appreciating against the US dollar and eventually help gold stay higher in the long term. From the economic data front, we have a few releases from the euro-zone in the form of PPI and current account which are likely to have positive impact on the euro support gold. In fact, euro-zone consumer confidence is likely to revive. Overall, we expect gold to trade higher today and recommend buying at dips. At the MCX, we could see another round of price rise as the rupee is expected to depreciate further in today’s trading session.

Silver: This morning, May futures silver is trading at $28.88; a marginal change over the previous close. As the day proceeds, we expect silver to stay volatile while at the MCX we continue to hold a buy stance. We have been noticing that silver has been highly influenced by many factors like gold, base metals and equities which are trading in different ways, leaving silver indecisive. We expect the same trend to continue in the near-term unless a clear stance develops from the fundamental front. Currently, Asian equities are trading moderately higher and should be helping silver stay elevated.
The euro might revive slightly, ahead of key positive data from the euro-zone. However, we still have to keep an eye on Cyprus and any effects it could have. This could possibly hinder silver gain. As discussed in the gold section, tonight’s FOMC rates decision is expected due to which we could see the markets staying a little cautious. So, overall, we expect silver to see mixed trade at the COMEX platform while some gains could be noticed at the MCX.
(money control)http://www.moneycontrol.com/news/brokerage-recos-commodities/mcx-gold-prices-may-riserupee-depreciation-karvy_840696.html