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Traders expect both gold and silver prices to remain higher this week on Fed's indications that the economic booster would continue. Fed chairman Ben Bernanke on Thursday told the Senate Banking Committee: "It was too early to make any judgement as to whether tapering of economic booster to start as early as September."
Gold in dollar terms rose 4.98 per cent last week to close at $1,296.10 an ounce (oz) in London. With a marginal 0.07 per cent appreciation in the rupee, coupled with a recovery in demand, gold price moved up 6.63 per cent to close at Rs 26,795 per 10 grams on Friday. The upsurge, albeit little, continued on Saturday with the yellow metal ending with a gain of Rs 90 at Rs 26,885 per 10 grams.
Investors, in contrast, were shy with silver. The white metal fell 0.81 per cent to close at $19.52 an oz on Friday in London. But in India, the demand trend was positive resulting in its price rising marginally by 1.87 per cent to Rs 40,940 a kg on Friday. On Saturday, however, silver declined to Rs 40,885 a kg.
"Both gold and silver will remain up in short term. Gold's hitting the technical resistance of $1,300 an oz would trigger the metal to move further up with a section of traders exercising short covering. Same case could be for silver with the white metal hitting $20 an oz in short term," said Prerna Desai, vice-president (research) of Kotak Commodities Services Ltd.
In rupee terms, however, the technical levels of gold and silver would translate into Rs 27,000 per 10 grams and Rs 43,000 a kg respectively. In the long term, however, the precious metals will bounce back, Desai said.
