India gold futures seen topping 5-month high
Gold futures in India are likely to top a five-month high as dollar weakness is seen prompting investors to seek out this alternative asset.
Gold futures in India, the world's top buyer of the bullion, are likely to top a five-month high as dollar weakness is seen prompting investors to seek out this alternative asset.
Gold and dollar, which compete for funds globally, move in opposite direction.
"We expect both gold and silver to rise on the back of weak US GDP data and dollar weakness," said Gnanasekar Thiagarajan, director with Commtrendz Research.
The most-traded gold for June delivery on the Multi Commodity Exchange (MCX) was 0.14% higher at Rs 29,149 per 10 grams, after hitting a high of Rs 29,169, a level last seen on December 8, 2011.
On Monday, the dollar briefly fell to a two-month low against a basket of currencies, hurt by signs that the US economic recovery was losing momentum, which keeps alive the chances of further monetary easing by the Federal Reserve.
Lack of physical buying in the domestic market could cap the upside in prices.
Most jewellers are fully stocked after lower-than-expected sales on last Tuesday's auspicious Akshaya Tritiya, the second-largest gold buying festival after Dhanteras. Sales halved to 10 tonnes from the previous year.
Silver futures too are likely to rise, even though some weakness was seen on the day.
Silver for May delivery on the MCX was 0.22% lower at Rs 55,750 per kg.
Buying is recommended on dips to Rs 55,700, for a target of Rs 56,800, maintaining a stop loss of Rs 55,400, said Commtrendz Research's Thiagarajan.