Bullions hover near unchanged territory

Gold for February delivery rose $1.2 (0.1%) to settle at $1,698.2 an ounce on the Comex division of the New York Mercantile Exchange on Monday. Prices fell to a low of $1,687.5 during intra day trading.

On Monday, March silver fell $0.02, or 0.1%, to settle at $32.28 an ounce. That is the lowest settlement in more than a month.

Attention of the market place remains on the U.S. "fiscal cliff" tax increases and spending cuts that is fast approaching. House Speaker Boehner and President Obama met again on Monday morning on the matter. The overall situation remains a bearish drag on many markets, including the raw commodities and stock markets.

 

In overnight news, European stocks and the Euro currency were weaker on more dour Euro zone economic news. Euro zone exports were reported down 1.4%, month-on-month, in October. Also, the German Bundesbank said Monday the German economy has seen significant contraction heading into the end of the year.

In Japan, the Liberal Democratic Party was swept into power over the weekend, implicating Japan's monetary policy will remain very accommodative. The Japanese yen was sharply lower against the U.S. dollar on Monday. Along with the U.S. Federal Reserve's commitment to easy money announced last week and the European Central Bank being in the same position, such are bullish underlying factors for the raw commodity markets in the coming months.

The dollar index, which weighs the strength of the dollar against a basket of six other currencies, fell by 0.1% on Monday.

Among economic data expected for the day, the December Empire State Manufacturing Survey registered a reading of -8.1, which was down from the prior month's reading of -5.2, and worse than the reading of 2.0 expected. Separately, the October net long-term TIC flows report indicated a $1.3 billion inflow of foreign capital into U.S. denominated assets. This follows the prior month's $3.3 billion inflow.

At the MCX, gold prices for February delivery closed higher by Rs 124 (0.4%) at Rs 31,332 per ten grams. Prices rose to a high of Rs 31,378 per 10 grams and fell to a low of Rs 31,123 per 10 grams during the day's trading.

At the MCX, silver prices for March delivery closed higher by Rs 137 (0.22%) at Rs 61,484/Kg. Prices opened at Rs 61,444/kg and rose to a high of Rs 61,820/Kg during the day's trading.

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