Stronger rupee may pressurize gold prices in India: Emkay

Emkay's report on precious metals:

US Gold futures closed up at  USD1390.50 an ounce, up by  USD6.20 or 0.45 percent for the week after touching a high of  USD1393 an ounce.

Gold prices were higher as World Bank lowered its global growth forecast to 2.2 percent this year from its previous projection of 2.4 percent increasing the worries about global growth.

Poor equity markets and poor inflation data from US erased the fear of Fed discontinuing its bond buying programme. Hedge funds and money managers slashed their bullish bets in gold and silver futures and options by 2,334 contracts to 54,779.

However, gold prices in India were up on back of a weaker rupee which prevented the slide in prices, rupee did gain by the end of the week after showing its all time low erasing the gains in Gold prices.

Gold prices are expected to go down internationally and in India as upcoming Fed meeting can direct towards its Bond Buying can pressurize gold prices. Stronger rupee will also pressurize prices in India.

Gold in India closed at INR 27,879/10gms, up by 1.08 percent and Silver closed at INR 43,834/kg, up by 1.96 percent.

Outlook:
Gold (Aug): Gold is likely to trade sideways to lower towards 27300 levels and any gains could be limited to 28200 levels.

Silver (July): Silver is expected to extend its declines towards 42000 levels. Strong resistance is at 45000.

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