Gold may remain higher on weak dollar index: Karvy

Karvy Commodities Broking's research report on bullion -

Gold October futures are trading at USD 1368, up by 0.51 percent. The dollar index is trading marginally down at present at 81.18, supporting the gains in gold prices. SPDR, the largest bullion-backed ETF marginally declined by 0.03 percent and settled at 912 tons from the previous day's closing. From the derivatives point of view, prices, volumes and open interest have increased, an indication that investors are more confident that prices may go up and are attracting fresh buying. This may support gold prices to trade up. In the European session, the current account balance and trade balance are expected to remain positive, which would support gains in the euro and cause gold prices to go up. During the US session, non-farm productivity and housing numbers are expected to remain weak, which would weaken the dollar and support gold prices. Concerns of a tapering of the quantitative easing could also cause gold prices to fluctuate. This morning, gold prices are trading up by 0.51 percent. Therefore, a higher opening in the domestic market may be witnessed. Hence, we expect gold prices to remain higher on the back of the weakness in the dollar index and other asset classes. Overall, we recommend remaining on the buying side in today’s session.

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