Gold outlook: Gold futures seen ranged

India gold futures are likely to tread sideways this week as support from debt concerns in Europe and physical demand is likely to offset the rise in the dollar,which dims the yellow metal's appeal as an alternative investment.

India gold futures are likely to tread sideways this week as support from debt concerns in Europe and physical demand is likely to offset the rise in the dollar,which dims the yellow metal8217;s appeal as an alternative investment.

We expect gold to be in a range of 20,100-20,500 rupees,There could be consolidation,said Tejas Seth,assistant vice-president,research,with SMC Global.

Gold contract on the Multi Commodity Exchange MCX was trading 0.13 percent lower at 20,284 rupees per 10 grams at 6:43 p.m. The contract had gained about 1 percent in the previous week.

The upside could be very minimal in gold,with debt issues around,buying could be done at 20,322/20,350,said Aurobinda Prasad,head of research,Karvy Comtrade.

The yellow metal had struck an all-time high of 20,569 rupees in early November.

Portugal is the next country that may struggle with its sovereign debt levels,investors fear,after both Greece and Ireland were forced to seek bailouts from the European Union earlier this year.

Gold and dollar often move in opposite directions as the two compete for funds globally. The dollar index was trading 0.44 percent higher at 80.711.

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Continuing physical demand in India,the world8217;s biggest buyer of gold,could also aid sentiment.

India8217;s gold market is still in the midst of its busy season,after the Dhanteras and Diwali festivals earlier,as many weddings are to take place till December,when demand for the yellow metal tends to go up.

Our sales to India Friday were the largest since Oct. 27,when gold traded under 1,330,and more than double the 2010 daily average,UBS analyst Edel Tully,a large supplier of gold to India,said in a note.

This is a strong indicator that there8217;s much residual physical demand in the system that will provide ample support on dips,said UBS8217; analyst Tully.

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In the quarter to September,India imported 214 tonnes of gold,up 21.6 percent on year,the WGC said.