Thursday June 12, 03:42 PM
India gold futures fall on overseas weakness, oil |
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MUMBAI (Reuters) - Indian gold futures fell sharply on Thursday tracking a weakness in overseas markets and a fall in crude oil prices, analysts said.
"Weak international cues are pulling down the domestic market," said Alex Mathews, head of research, Geojit Financial Services Ltd.
Overseas gold fell more than 1 percent on Thursday after the dollar bounced against the euro, erasing some of the metal's appeal as an alternative investment, with falling oil prices also adding to selling pressure.
Oil fell almost $1 on Thursday, reversing some gains from the previous session, when prices jumped closer to last week's record high as a steep drop in inventories in the United States heightened supply concerns.
Crude oil and gold move in tandem as the former signals inflation, while the latter is hedge against rising prices.
A fall in domestic equity market also weighed on the sentiment as some traders sold their positions in the yellow metal to cover losses in the stock market, said an analyst with Motilal Oswal Commodities Broker Pvt Ltd.
Indian shares fell nearly 3 percent on Thursday after the central bank raised a key lending rate to curb inflation, heightening concern consumer demand would slow down and hurt earnings growth.
The August contract on MCX is expected to trade in the range of 12,090-12,185 rupees, Mathews said.
Open interest for August gold on MCX was at 7,851 lots, up from 7,725 the previous session. Volume on Wednesday was 43.2 kg.
Following are gold prices in rupees per 10 grams on the Multi Commodity Exchange of India Ltd. at 11:36 a.m. :
Contract Current price Net change
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Aug 12,122 -119
Oct 12,165 -117
(Reporting by Debiprasad Nayak)
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