Mumbai: Indian gold futures rose on Friday on firm overseas markets and a weak rupee, analysts said.
“All the fundamentals are looking bullish. Firm international market and a bounceback in oil prices are supporting the market,” said Gnanasekar Thiagarajan, director, Commtrendz Research.
Overseas gold gained more than 1% on Friday after falling to its weakest since October 2007, but investors refrained from taking large positions, with their confidence already shaken by turmoil in the financial markets.
Oil prices recovered to above $101 a barrel on Friday, as the markets kept a watchful eye on the path of Hurricane Ike that could disrupt refineries and production in the US for weeks.
Gold generally moves in tandem with crude oil as the latter signals inflation, while the metal negates it.
“A weak rupee also boosted sentiment,” said an analyst with Motilal Oswal Commodities Broker Pvt Ltd.
The Indian rupee dropped to its lowest in nearly two years on Friday as banks bought dollars locally to sell them in the offshore market and take advantage of the price differential.
“The October contract on MCX is expected to trade in the range of Rs11,275 - 11,450,” Thiagarajan said.
Open interest for October gold on MCX was at 13,632 lots, down from 13,807 the previous session. Volume on Thursday was 73.9 kg.