Stronger Rupee may limit Gold rally in India: Emkay

Emkay Commotrade has come out with its report on precious metals and energy. According to the research firm, Gold in India is also expected to go higher. However a stronger rupee could limit the upside in prices.

Precious Metals:

U.S. gold futures for April delivery settled up $6.30 at $1,613.80, with trading volume about 20 percent below its 250-day average.

Gold prices rose to a month high as safe haven buying emerged after the EU gave Cyprus a deadline till Monday to avail the bailout funds else exit the euro zone.

BOJ governors pledge to adopt ultra loose monetary policy to end the decade long deflation in Japan also supported gold prices.

Holdings of SPDR Gold Trust GLD, the world's biggest goldbacked exchange-traded fund, fell 0.902 tonnes from the previous session to 1,221.26 tonnes on March 21, the lowest since July 2011.

Gold prices are expected to go further up as the risk appetite has been dampened by the Cyprus issue and will continue to boost gold’s safe haven appeal.

Gold in India is also expected to go higher. However a stronger rupee could limit the upside in prices.

Gold for April delivery on the Multi Commodity Exchange (MCX) was up by 0.49% at INR 29,827/10gms.

ENERGY

U.S. crude futures for May delivery settled down $1.05 at $92.45 a barrel, down by 1.12%.

Uncertainty regarding Cyprus bailout put pressure on crude prices.

Negative PMI numbers from the euro zone also put pressure on crude prices, raising concerns about the demand from the region.

We anticipate that crude oil prices will go down as investors would wait till Monday to get clarity on Cyprus bailout.

Natural gas fell on Wednesday as lower than expected inventory withdrawal pushed prices down

US Natural gas looks lower as weather shift has reduced the demand and overall inventories are touching all time high which can pressurize Natural Gas prices.

Front-month gas futures on the New York Mercantile Exchange ended down 2.5 cents at $3.935 per million British thermal units after posting an 18-month high of $4.025.

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