Gold likely to surge past two-week high

According to the article, Indian gold futures are expected to surge past their highest levels in two weeks, helped by expectations of a further depreciation in the rupee. Gold will also find more support from Russian central bank buying.

Source: Reuters
Mon, Jul 23, 2012 at 15:26
Money Control

Indian gold futures are likely to surge past their highest level in two weeks, helped by expectations of a further depreciation in the rupee.

The most-active gold for August delivery on the Multi Commodity Exchange (MCX) hit a high of Rs 29,397 per 10 grams, a level last seen on July 11. At 9:26 GMT, gold was trading up 0.26% at Rs 29,354 per 10 grams.

"Gold will undoubtedly find support from the rupee's depreciation, and also, some support from Russian central bank buying," said Gnanasekar Thiagarajan, director with Mumbai-based Commtrendz Research.

Buying is recommended in gold on a dip to Rs 29,250, for a target of Rs 29,400-29,500, with a stop loss at Rs 29,100, said Thiagarajan.

The rupee, which hit its lowest level in a week, plays an important role in determining the landed cost of the dollar-quoted yellow metal.

In the overseas market, Russia's central bank raised its gold reserves by 6.2 tonnes to 836.3 tonnes in June. Central-bank buying has underpinned gold's rallies in the last several years.

Silver futures, which traded steady on Monday, could fall due to a weakness in base metals. Silver for September delivery on the MCX was trading 0.12% lower at Rs 52,778 per kg.

Selling is advised in silver on rallies to Rs 52,800, for a target of Rs 51,900, said Thiagarajan.

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