India’s gold futures extended gains for a second day on Wednesday on bargain-buying triggered by falling equity markets which revived worries about the health of corporate earnings,analysts said.
Gold was further supported by a weak rupee,which typically makes the dollar-quoted yellow metal expensive,they added.
The benchmark gold June contract was 1.06 per cent higher at 14,448 rupees per 10 grams at 11:52 a.m.,after hitting a high of 14,465 rupees in early deals. The contract had gained 1.2 per cent in the previous session.
Economic uncertainties trigger buying in gold as the metal is considered a safe haven investment.
The Indian rupee fell more than 1 per cent on Wednesday on fears that foreigners may withdraw funds as local stocks fell sharply,with sentiment also weakened by broad gains in the dollar against other currencies.
“It is looking bullish for the day on rupee and falling equity markets and likely to test 14,550 (rupees),” said Gnansekar Thiagarajan,director with Commtrendz Research in Mumbai.
“Gold may test 14,650 in a couple of days,” said Thiagarajan.
Gold will face some resistance at 14,600 levels,said Vikas Vaid,assistant vice-president with Asit C. Mehta Commodity Services.
Open interest for June gold on MCX was at 13,203 lots,up from 12,865 a day earlier. Volume on Tuesday was 33.42 kg.
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