Expert Analysis for Gold and Silver Futures Trading

gold-barsGold futures rose above $970 an ounce on Tuesday, scaling a two-month high on the back of dollar weakness and growing investor risk appetite, but settled slightly lower at $968.4 an ounce on COMEX.

Silver future outperformed gold in terms of percentage rise. It rose by 2.15 and 2.24 percent on MCX and COMEX respectively.

The world's largest gold-backed exchange-traded fund, the SPDR Gold Trust, said holdings stood at 1,072.87 tonnes as of Aug. 4, unchanged from the previous business day.

Gold jewellery sale volumes in Dubai fell around 40 percent in July on a year ago, as the economic downturn and summer heat deterred tourism, retailers said on Tuesday. Abu Dhabi, capital of the UAE, is less dependent on tourists than Dubai and saw sales in July up 30 percent on the year as expatriates bought jewellery before leaving for summer breaks.

Gold and gold receivables held by euro zone central banks fell by 6 million euros to 232.120 billion euros in the week ending July 31, the European Central Bank said on Tuesday.

Indian gold buyers trickled in at lower levels on Tuesday as traders geared up to meet festive demand, dealers said. India's festival season starts with Rakshabandhan on Wednesday, gold-buying begins to pick up.

The world's largest silver-backed exchange-traded fund, the iShares Silver Trust, said its bullion holdings fell 3.47 tonnes, or 0.04 percent, to 8,824.67 tonnes as of Aug. 4. The holdings of the New York-based trust, which issues securities backed by physical stocks of silver, rose to a record 8,828.14 tonnes on July 31 and stayed at that level for two business days.

The trend for the day is expected to be sideways to down in Silver. We may witness some profit booking in Silver following the profit booking in industrial metals. We expect gold prices to trade firm during the day as we do not see a major downside in gold in short term.