Mumbai: India gold futures rebounded sharply on Thursday tracking overseas markets, but a strong rupee kept a lid on gains, analysts said.
The benchmark April gold contract was 3.26% higher at Rs15,233 per 10 grams at 11:21 am, after hitting a high of Rs15,292 in early deals. The contract had shed 2.6% in the last session.
Comex April gold surged by over 4% after the Federal Reserve said it will buy up to $300 billion worth of long-dated US government debt, which rejuvenated bullion’s appeal as a hedge against inflation.
“Fed’s actions added fuel to fire,” said Pradeep Unni, a senior research analyst with Richcomm Global Services in Dubai.
Analysts said the yellow metal may see a further upside, but it could be restricted due to a strong rupee.
“The move by Fed would weaken the dollar and fuel gold’s rally further,” said Debjyoti Chatterjee, associate vice-president with MAPE ADMISI in Mumbai, adding ”the momentum is very much positive in gold.”
“Technically there is still room left on the higher side which might take gold northwards,” said Unni, adding ”If gold manages to hold above 14,850, in today’s session gold might rise to 15,500.”
Open interest for April gold on MCX was at 14,167 lots, down from 15,440 a day earlier. Volume on Wednesday was 86.93 kg.