Mumbai: India gold futures extended losses on Wednesday on strong dollar overseas coupled with China’s monetary tightening, which is expected to drain appetite for risky assets, analysts said.
The most-active February gold contract was 0.58% lower at Rs16,780 per 10 grams at 10:51am, after losing 0.9% in the last session.
The dollar index was 0.10% higher at 77.029 at 10:44am. A strong dollar dims the dollar-quoted yellow metal’s appeal as an alternative investment.
China’s central bank on Tuesday said it was raising banks’ reserve requirements by 0.5 percentage points, effective 18 January, in the clearest sign yet that it has begun to tighten monetary policy.
“Gold is expected to move in a range, top could be seen at 16,975, and then it could inch lower to 16,700,” said Gnanasekar Thiagarajan, director, Commtrendz Research.