By
Reuters
Published
Mar 22, 2010
Download
Download the article
Print
Text size

India gold seen lower during the week

By
Reuters
Published
Mar 22, 2010

MUMBAI (Reuters) - India's gold futures may trade lower this week tracking weak overseas prices and on the back of a rate hike in India last week.



The dollar is strengthening since last week and may gain further weighing on gold prices, analysts said. The currency is inversely related to the yellow metal.

"We see downside in gold this week...dollar may gain further," said Aurobinda Prasad, head of research, Karvy Comtrade.

The most-traded April gold contract was 0.33 percent lower at 16,452 rupees per 10 grams at 5:32 p.m.

India's surprise 25 basis-point interest rise on Friday 19 March weighed on international prices and sparked speculation other countries may follow suit.

Low interest rates, which cut the opportunity cost of holding gold, have been a major support to prices in the last year.

India, the world's biggest gold importer, unexpectedly raised its short-term borrowing and lending rates by 25 basis points each for the first time since it began cutting in 2008, citing intensifying inflationary pressures and a steady economic recovery.

(Reporting by Sourav Mishra, editing by Sunil Nair )

© Thomson Reuters 2024 All rights reserved.