Monday August 17, 06:40 PM

OUTLOOK - India gold may tread lower on strong dollar

MUMBAI (Reuters) - India gold futures may tread lower this week weighed by expectations of a strong dollar, dimming the yellow metal's appeal as an alternative asset, analysts said.

The most-traded October contract was 0.40 percent lower at 14,836 rupees per 10 grams at 6:20 p.m.

"Dollar is expected to gain further on rising risk aversion. Further weak crude would also weigh on prices," said Harish Galipelli, head of research with JRG Wealth Management, a Kochi-based commodity brokerage.

"The negative bias in gold is due to higher dollar this week," said Aurobinda Prasad, deputy manager-research, Karvy Comtrade.

The euro hit a two-week low against the dollar and the yen after weak global shares and oil prices ruined traders' appetite for risk and battered currencies seen to be high-risk.

Analysts said investors would also await U.S. data like PPI and housing starts, slated later in the week, for direction in the precious metal complex. "Any rally towards 15,000 rupees could give us a selling opportunity, with a strict stop loss of 15,020, and with a target of 14,700 rupees," said Galipelli.