Mumbai: Indian gold futures moved up sharply on Thursday, 22 May, on a weak rupee and tracking firm overseas market, analysts said.
Gold for delivery in June gained Rs145 to Rs12,971 per 10 grams at noon on the Multi Commodity Exchange of India. The August contract was up Rs139 at Rs13,005.
“It seems there is no speedbreaker for the domestic gold prices. Higher oil, weak rupee all are pushing up the market,” said Gnanasekar Thiagarajan, director of Commtrendz Research.
Overseas gold climbed back above $930 on Thursday as oil set a new record high, fanning fears of inflation and encouraging investors to buy the precious metal as a hedge.
Crude oil galloped to a high above $135 Thursday, extending this month’s near-20% rally after a sharp drop in US crude stocks and a weakening dollar triggered short-covering.
The rupee fell past 43 a dollar for the first time in more than 13 months on Thursday, taking its losses in 2008 to nearly 9%, as record crude prices heightened concerns of a worsening trade deficit.
Most of India’s gold is imported and a weak rupee makes imports expensive.
The June contract on MCX rose more than 8.5% in the last six trading sessions.
June gold is expected to to trade in the Rs12,790-13,100 range, said Debjyoti Chatterjee, associate vice-president, MAPE Admisi Commodity Research.
Open interest for June gold was at 7,603 lots, down from 7,830 the previous session. Volume on Wednesday was 42.5 kg.