Why MCX Gold, Silver bounce back expected Tuesday evening

The morning witnessed gold and silver prices opening lower on India's MCX. This was mainly due to the correction occurred because of the appreciation in Indian Rupee. The evening will see release of US trade balance data on 07.00 PM IST which is expected to be positive for bullion.

A figure that exceeds negative $42.6 billion would be bullish for USD and thereby bearish for gold, silver and vice versa. But chances are less that the US would come out with a positive trade balance figure.

This may lent some upside to gold and silver prices on the MCX for evening.

Gold for February delivery on the MCX is having a good support at Rs.31280 and resistance at Rs. 31490. Intra-day traders are advised to take a long position in Gold February contract at around Rs. 31350 with stop loss of Rs 31280 for the target near Rs 31450.

When it comes to silver March contract on the MCX, charts look sideways and good support is expected at Rs.62200 and resistance at Rs.63050. Intra-day traders advised to take a long position in silver March contract around Rs 62500 with stop loss of Rs 62200 for the target near Rs 63000.

As of 04.08 PM IST Gold for February delivery on MCX was seen trading at Rs.31368/ 10 grams a loss of 0.4% while silver for March delivery was spotted trading at Rs.62545/ KG, a loss of 0.64%. Gold on the Comex was at $1710.75 an ounce, a loss of 0.21% as of 04.22 PM IST. Silver, meanwhile was at $33.170 an ounce registering a loss of 0.62%.

Markets are also attentive to the US Federal Open Market Committee's meeting on monetary policy scheduled for today and Wednesday. Market observers say a monetary easing measure or QE4 may not be that far away.

If QE 4 is fired, it is expected to cast a bull run in commodities and equities.

Meanwhile Gulf News has reported that US Fiscal Cliff talks have come to a stand still. The US President, Obama is insisting that Republicans agree to tax the rich while the latter wants Obama to name the specific spending cuts.

The US, if it goes off the cliff would see automated kicking-in of $600 billion in spending cuts and tax hikes. This, many talented analysts say, could bring in a new round of recession thereby boosting bullion demand.