Jun 11, 2012, 07.11 PM | Source: Reuters
Indian gold futures are likely to recover this week on expectations of a further fall in the rupee and the return of risk appetite for the yellow metal.
At 1058 GMT, the most-active gold for August delivery on the Multi Commodity Exchange (MCX) was 0.44% higher at Rs 29,673 per 10 grams, recovering from the previous week's losses of about 2%.
"Buying at support of 29,400-29,450 in gold could be a good strategy," said Pranav Mer, senior analyst with Mangal Keshav.
The rupee, which weakened on Monday, plays an important role in determining the landed cost of the dollar-quoted yellow metal.
The euro zone's decision to help Spain's battered banks, boosts risky assets like the yellow metal and pressures the dollar.
Euro zone finance ministers agreed on Saturday to lend Spain up to 100 billion euros to shore up its teetering banks, providing relief for markets that have lately been gripped with fear of a potential breakdown of the euro zone.
Silver futures are likely to follow gold.
Buying is advised in silver at Rs 54,200, for a target of Rs 55,250, said Gnanasekar Thiagarajan, director with Commtrendz Research.
Silver traded at Rs 54,715 per kg on Monday, up 0.93% on day.