Mumbai: Indian gold futures opened weak on Tuesday tracking lower crude oil prices, but a weak rupee may support the market later in the day, analysts said.
“A sharp fall in oil prices pulled down the market,” said Gnanasekar Thiagarajan, director, Commtrendz Research.
Oil fell 1% on Tuesday after shedding nearly $4 the previous session on renewed fears of economic recession, with investors unwilling to place big bets before the US presidential election.
Gold generally moves in tandem with crude oil as the latter signals inflation, while the metal negates it.
“However, a weak rupee may provide some support,” said Devarsh Vakil, head of research, Anagram Capital Ltd.
The Indian rupee fell on Tuesday as losses in stocks raised expectations that foreign funds may sell some of their holdings after sharp rallies in the previous four sessions, but traders expected the central bank to step in to curb steep falls.
“The December contract may trade in a range of Rs11,500-11,700 during the day,” Thiagarajan said.
In other macroeconomic indicators, traders would be watching US factory orders for September, analysts said.
Open interest for December gold on MCX was at 8,509 lots, up from 8,401 a day earlier. Volume on Monday was 38.8 kg.