Oct 08, 2012, 05.19 PM | Source: Reuters
Indian gold futures are likely to extend losses for a fifth week, breaking their lowest level in more than a month, weighed by a stronger dollar.
The most-active gold for December delivery on the Multi Commodity Exchange (MCX) was 0.34 percent higher at Rs 31,272 per 10 grams, after hitting a low of Rs 31,081 earlier in the day, nearing a level last seen on August 31.
Selling is advised on rallies in gold at Rs 31,350, with a stop loss at Rs 31,500, targeting Rs 31,000, said Gnanasekar Thiagarajan, director with Commtrendz Research in Mumbai, adding the firm dollar could weigh on prices.
The dollar rose on concerns about the outlook for the global economy and company earnings, recouping losses from the previous session that followed strong U.S. jobs data. Gold and dollar often move in opposite direction as the two compete for funds globally.
"Once it goes close to a support of Rs 30,800, then some bargain hunting could begin," said Thiagarajan.
Falling crude oil prices are also likely to weigh on prices of the yellow metal, which is also considered as a hedge against inflation.
A revival in imports ahead of festivals could keep the downside in prices limited, analysts said. The festival and wedding season will start picking up in late October and peak next month during Diwali and Dhanteras, traditionally occasions for buying gold.
Silver extended losses for another session to its lowest in more than a month following copper, another industrial metal.
Silver for December delivery on the MCX was 0.77 percent lower at Rs 61,324 per kg, after hitting a low of Rs 61,043 earlier in the session, a level last seen on September 5.
Selling is also advised on rallies in silver at Rs 61,900, with a target of Rs 60,500, said Thiagarajan.