Gold may shed Rs 600 on weakening global trend

Gold may shed Rs 600 on weakening global trend: Analysts
7 Sep, 2008, 1200 hrs IST, PTI
NEW DELHI: Gold prices will continue to show weakening trend this week and is likely to further shed up to Rs 600 in the futures market on the back of lower crude oil prices and strengthening US dollar, say analysts.

The prices of the precious metal would hover in the range of Rs 12,000-11,100 per 10 gram, Karvy Comtrade's analyst Bhavna Glory said.

"Gold is likely to shed Rs 500-600 per 10 gram this week," she pointed out.

According to analysts, if the precious metal breaches the projected lower limit of Rs 11,100, the prices could go down up to Rs 10,700 level per 10 gram.

Meanwhile, in the international market, the spot prices of the precious metal are likely to trade between 820-770 dollar an ounce.
Further, experts feel that if gold tumbles below the lower level of 770 dollar per ounce, then the metal could be as cheap as $750.

Another dampener for the precious metal could be the Industrial Production figures from the Eurozone, expected to be released this week.

"This week, the Industrial Production Index figures from Europe is expected to be negative, which would have a negative impact for both the Euro and the bullion," Bhavna Glory pointed out.

Moreover, the Advance Retail Sales data from the US, which has been on the decline and figures of US Trade Deficit, could bring down the gold prices further.

Noting that gold would be on the downward trajectory in the coming days, Religare Commodities metals and Energy Research In-charge Somnath Dey said, "the only good thing for gold is the festive season in India, but it amounts to only five per cent."

SMC Global Vice-President Rajesh Jain said gold is likely to trade in the range of 780-820 dollar an ounce.
"Gold is slightly oversold and this week it is likely to consolidate its position," he added.

In the previous week also gold was bearish and had hit a low of 790 dollar on account of strengthening greenback against the Euro. US dollar had touched 1.4214 level against Euro, an 11-month high and a negative factor for gold price.

However, on Friday, Bureau of Labor and Statistics report showed an increase of 1.4 per cent in the US unemployment rate to 6.1 per cent which in turn helped to limit the downward movement of gold.