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India gold down 1.5% as investors take profits

India gold down 1.5% as investors take profits
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First Published: Thu, Feb 26 2009. 11 54 AM IST
Updated: Thu, Feb 26 2009. 11 54 AM IST
Mumbai: India gold futures fell by about 1.5% on Thursday as investors continued to cash out after the yellow metal’s rise last week to a record high of Rs16,040, analysts said.
However, they said the downside was limited by a weak rupee.
“It is healthy profit-taking after a strong bull run and is expected to continue to Rs15,000,” said Debjyoti Chatterjee, an associate vice-president with MAPE ADMISI in Mumbai.
“The overall picture looks bearish in gold for the time being,” said Chatterjee, adding that if the metal falls below Rs15,000 then “the next level possible would be 14,800.”
A weaker rupee supports the dollar-quoted yellow metal. The Indian unit weakened past 50 per dollar to its lowest level in nearly three months as month-end demand for the US unit from importers and oil refiners and higher crude oil prices weighed on sentiment.
The benchmark April contract was 1.48% lower at Rs15,265 per 10 grams at 11:41pm, off the day’s high of Rs15,458 earlier.
The contract gained 8.3% last week on safe haven purchases amid the deepening global recession and on concerns about financial stability in the US economy.
“The most-awaited correction has set in as expected,” said Devarsh Vakil, manager-research, Anagram Capital, adding “we are still cautious.”
Selling is recommended below 15,200, with a target of 14,900 and a stop loss of 15,420, Vakil added.
Analysts expect bouts of profit-taking to continue but concur that the overall intermediate trend is still up.
Open interest in April gold on MCX was at 18,312 lots, down from 18,403 a day earlier. Volume on Wednesday was 73.41 kg.
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First Published: Thu, Feb 26 2009. 11 54 AM IST
More Topics: India | Gold futures | Rupee | Dollar | Investors |