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NewsWire18, Monday, Jul 26
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By Shrikant Kuwalekar
MUMBAI - Domestic and international gold futures are likely to remain
subdued over the next 5-6 trading sessions as waning investment demand, and
weak technical charts are likely to pressurise the metal, analysts and
dealers said.
However, the extent of fall in domestic market may be limited by a grim
outlook on rupee against the dollar, they said.
"On MCX and ICEX, the most active August contracts have a minor support
around 18,200 rupees per 10 gm, breaking which, it will fall to 18,040 rupees
during the week," said Kamlesh Jogi, research analyst with Fortune Financial.
The contracts were today marginally in red around 18,240 rupees per 10 gm.
However, some news-based periodic bounce backs are possible in the yellow
metal prices, which, however, may not sustain due to lack of follow-up
investment buying in the gold, Jogi said.
"Despite recent fall in gold prices (from $1,266 an ounce to $1,185), we
haven't heard of revival in physical demand in Asia or the West. Even,
investment demand is also on the gradual decline," said Pooja Chhabria,
senior analyst with Ventura Commodities.
Gold holding with the world's largest gold-backed exchange traded fund,
SPDR GoldTrust, declined to 1,302 tn as on Friday, from a record high of
1,320.44 tn on Jun 30.
Last week, the fund registered largest weekly fall since January of over
12 tn.
This has been pressurising gold constantly, Chhabria said.
The ease in Eurozone problems, following better-than-expected results
from banks' stress tests and a few economic numbers from 16-nation group have
raised hopes that the continent may avoid second recession, which will be
negative for gold, she added.
An analyst with a city-based brokerage said that rising rate scenario in
some economies, such as Australia, Korea, Taiwan, Thailand and now likely in
India, have reasonably reduced the upside potential in gold, barring major
economic crisis-like situation in the coming days.
Both the analysts agree that on the technical charts, the world's
benchmark COMEX gold was heading for $1,175 an ounce, and a close below that
could take prices further down to $1,130-$1,145 zone.
"With expected fall of 1.0-1.5% in rupee-dollar rate, domestic gold
futures should hold 18,000 rupees per 10 gm level with further downside
possible to 17,880 rupees," the Mumbai-based analyst said.
Silver is likely to largely track the yellow metal. However, if the
current uptrend in base metal continues, the white metal can outperform gold
by wide margin, analysts said.
The most active September silver contracts on MCX and ICEX can trade in
28,600-29,500 rupees in the next 4-5 sessions, dealers said.
The contracts were trading today slightly down around 29,100 rupees a
kg. End
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US$1 = 47.04 rupees
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Edited by Sandeep Deshmukh
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Category : C/DRV C/MAR C/MET C/PRE C/GOL C/SIL C/OUT R/ASI R/IN R/S
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story-number = 12477 - 26-07-2010
transmission-datetime = 7/26/2010 9:06:48 PM
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