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Gold rises further on flight to safety

Gold rises further on flight to safety
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First Published: Fri, Mar 06 2009. 11 28 AM IST
Updated: Fri, Mar 06 2009. 11 28 AM IST
Mumbai: Gold futures extended gains on Friday on continued flight-to-safety buying amid sagging equity markets, but a firm rupee kept a lid on gains, analysts said.
“The way stock markets have tanked has resulted in risk aversion in favour of gold,” said Gnanasekar Thiagarajan, director of Commtrendz Research in Mumbai.
Weak equity markets typically leads investors to gold, which is seen as a safe-haven asset.
Gold would face ‘good resistance´ at Rs15,650-15,675 and will have to clear Rs15,780-15,800 in order to revisit its recent record high, Thiagarajan added.
Gold futures had witnessed an all-time high of Rs16,040 per 10 grams on 20 February as investors turned to the yellow metal amid the deepening global recession.
The benchmark April contract was 0.76% higher at Rs15,514 per 10 grams at 11:09am, after hitting a high of Rs15,539 earlier.
A firm rupee makes dollar-quoted precious metal cheaper. The rupee strengthened after opening lower on Friday as gains in other Asian currencies against the dollar boosted sentiment even as the domestic stock market dropped more than 1.5% early. “The bias is still positive,” said Harish Galipelli, head of research with Karvy Comtrade, adding gold may trade in the range of Rs15,250-15,550 for the day.
“We might see some consolidation for next two to three weeks in the range of Rs14,800-16,000,” said Galipelli.
Open interest in April gold on MCX was at 17,509 lots, up from 17,435 a day earlier. Volume on Thursday was 62.18 kg.
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First Published: Fri, Mar 06 2009. 11 28 AM IST
More Topics: Gold | Bullion | Commodity | Markets | India |