Mumbai: Indian gold futures fell on Tuesday bucking an overseas trend on the back of a strong rupee but, analysts said, it may recover later in the day due to higher crude oil prices.
Overseas spot gold was at $662.30/662.90 an ounce at 0402 GMT, largely flat from $662.00/$663.50 overnight.
“The gold prices may slightly move up on higher crude oil prices, but a rising rupee is likely to hurt the sentiment,” said Harish Galipelli, head of research, Karvy Comtrade Ltd.
The rupee was trading at 40.615/625 per dollar, climbing from Monday’s close of 40.66/68. It hit 40.50 per dollar on Monday — its highest since May 1998.
An analyst with Man Financial Commodities India Pvt. Ltd. said the support for June gold on the Multi Commodity Exchange of India Ltd (MCX) would be at Rs8,700.
“We can see some upward rally and short positions should be covered,” said Rajini Panicker, head of research, Man Financial Commodities India Pvt. Ltd. The open interest for June gold on the Multi Commodity Exchange of India Ltd (MCX) was at 13,031 lots early Tuesday, slightly up from 12,964 lots the previous day. The volume on Monday was 21.9 kg.