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Gold seen falling past 1-month low

Source : REUTERS
Last Updated: Mon, Oct 01, 2012 09:27 hrs
An Indian woman looks at gold necklaces at a jewellery shop in New Delhi

Gold futures in India, the world's biggest consumer, are likely to fall beyond a monthly low on Monday weighed by expectations of a stronger dollar, which is considered as an investment alternative to the yellow metal.

"Risk aversion on the back of euro zone worries is expected to boost the dollar and pressure commodities," said Gnanasekar Thiagarajan, a director with Commtrendz Research.

At 1:38 p.m., the most-active gold for October delivery on the Multi Commodity Exchange (MCX) was 0.33 percent lower at 31,097 rupees per 10 grams, after hitting a low of 31,062 rupees earlier, a level last seen on August 31.

Selling is advised in gold at 31,300 rupees, with a target of 30,900 rupees, and a stop loss of 31,450 rupees, said Thiagarajan.

The dollar and gold often move in opposite directions as the two compete for funds globally. The euro fell to a three-week low after an audit of Spain's banks failed to quell concerns about the country's progress towards a bailout needed to shore up its public finances.

The fall in gold prices is likely to be limited due to a partial revival in physical demand in the festival season in India, which will continue until December.

Industry officials estimate a more than 50 percent fall in gold imports this year.

Silver also edged lower, extending losses for a third straight session on Monday.

Silver for December delivery on the MCX was 0.48 percent lower at 62,477 rupees per kg.

In silver, selling is advised on rallies to 63,200 rupees, with a stop loss of 63,450, and a target of 62,400.




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