Mumbai: Indian gold futures, weak in early trade on Tuesday, 20 November, tracking overseas markets, pared losses to move higher on short covering, analysts said.
“The weakness in overseas markets pulled down prices here ... but some short covering after a sharp fall helped the market to recover,” said Amar Singh, head of research at Angel Commodities Broking Pvt Ltd.
December gold was up Rs3 at Rs9,927 per 10 grams at 11:45am on the Multi Commodity Exchange of India (MCX). The contract has lost about 4% in the last four trading sessions. Gold for delivery in February gained Rs4 to Rs10,009.
The subprime concern is causing selling presure in global commodity markets as many broking firms with exposure to equities and commodities are now squaring off their positions, he said.
Overseas gold extended losses on Tuesday and hovered near its lowest level in more than three weeks as investors, concerned about the health of the US economy, avoided riskier assets.
Weaker stock markets often result in liquidation in bullion as investors seek cash to cover margin calls and losses.
The December contract is expected to trade in the range of 9,960-9,790 rupees, said Debjyoti Chatterjee, associate vice president at MAPE ADMISI Commodity Research.
Open interest for December gold on MCX was at 9,453 lots, down from 9,522 the previous session. Volume on Monday was 35.2 kg.