Gold eases, but buyers eye more falls

Gold eases, but buyers eye more falls
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First Published: Mon, Oct 06 2008. 03 24 PM IST
Updated: Mon, Oct 06 2008. 03 24 PM IST
Mumbai: India’s gold prices eased on Monday in tune with overseas markets where a firm dollar and weak crude oil erased some of the metal’s safe-haven appeal, dealers said.
In the local market, demand was still thin as buyers stayed away on hopes for further fall, they added.
“Another 5% fall from current levels will make people buy gold again,” said Daman Prakash, director of MNC Bullion Pvt Ltd, a wholesaler in Chennai.
“Silver is seeing good demand however as it has fallen much more than gold.”
Foreign gold that guides the local market slipped nearly 1% as the dollar firmed to a 13-month high against the euro and crude oil fell on a poor demand outlook.
Gold generally has an inverse relation with the dollar as the two compete for funds. But the metal usually tracks crude oil as the latter signals inflation that the metal negates.
Silver futures on the Multi Commodity Exchange of India Ltd (MCX) traded at 18,788 rupees per kg, down by 1.43% over the previous day compared to a negligible fall for gold futures.
With Dussera this week and Dhanteras and Diwali falling later this month, retail sales are expected to increase, prompting traders to look for attractive prices to buy.
“If it falls to around 12,200 rupees per 10 grams we can have a very good Diwali,” said Ghanshyam Nichani of Dhanraj Jewellers in Mumbai.
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First Published: Mon, Oct 06 2008. 03 24 PM IST