Gold futures ease from eight-month high

Last Updated: Tue, Aug 20, 2013 10:14 hrs
A shopkeeper displays gold jewellery inside his showroom in Jammu

Gold futures eased from their highest level in eight months on Tuesday on profit-taking as the rupee came off its early low and overseas markets fell.

At 2:47 p.m., the actively traded gold contract for October delivery on the Multi Commodity Exchange (MCX) was 1.83 percent lower at 30,595 rupees per 10 grams, after hitting a high of 31,278 rupees in the last session, the level last seen on December 18.

Technical indicators show highly overbought conditions, leading to profit-booking, said Gnanasekar Thiagarajan, director with Commtrendz Research.

Thiagarajan said the outlook was negative for gold prices on a weekly basis, with the U.S. Fed minutes and subsequent news of tapering off likely to dent gold prices.

The rupee plays an important role in determining the landed cost of the dollar-quoted yellow metal.

Silver contract for September delivery on the MCX was 2.4 percent lower at 49,988 rupees per kg.

Overseas silver slid nearly 4 percent, falling a second straight session after its biggest rally in five years, as worries over the U.S. stimulus outlook and technical selling dragged it lower and gold followed.

In the physical market, gold traders awaited imports to re-start ahead of the key festivals and weddings next month.

A resumption of imports would ease tight domestic supply and prices ahead of a festival and wedding season that kicks off next month. Indian imports would also support benchmark international gold prices.

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