Mumbai: India’s gold futures eased a bit on Friday, 22 August, with foreign markets stable, after sharp gains a day ago on the back of surging crude and a weaker dollar.
“With crude oil and the euro looking strong, gold is stabilizing,” said Shailendra Kumar, head of Commodity Research Group.
The precious metal for delivery in October shed Rs11 to Rs11,812 per 10 grams at around 11am on the Multi Commodity Exchange of India Ltd (MCX). The December contract lost Rs8 to 11,920.
Foreign gold was flat but found support from firmer oil, which was reacting to mounting tensions between the US and Russia over a missile defence shield programme.
A weaker dollar on continuing tensions over the health of the US financial sector also propped up gold.
Gold generally moves in tandem with crude oil as the latter signals inflation, while the metal negates it. But it has an inverse relation with the dollar, as the two compete for funds.
Kumar said the benchmark October gold was likely to face resistance at Rs11,900 per 10 grams and support at Rs11,740.
The open interest for October gold was at 10,825 lots, up from 10,788 on Thursday. Thursday’s volume was 64.434 kg.