Gold seen recovering from five-month low

MUMBAI Mon Feb 4, 2013 5:48pm IST

A customer looks at gold bangles inside a jewellery showroom in Hyderabad April 11, 2012. REUTERS/Krishnendu Halder/Files

A customer looks at gold bangles inside a jewellery showroom in Hyderabad April 11, 2012.

Credit: Reuters/Krishnendu Halder/Files

Related Topics

MUMBAI (Reuters) - Gold is likely to recover from its lowest level in more than five months, helped by a weaker dollar, which enhances the appeal of the yellow metal as an alternative investment.

The euro retreated from multi-month highs against the yen and dollar on Monday as speculators took profit on the common currency's rally, with the market cautious before a European Central Bank meeting on Thursday.

The actively traded gold contract for April delivery on the Multi Commodity Exchange (MCX) was 0.07 percent lower at 30,577 rupees per 10 grams, after hitting a low of 30,487 rupees, a level last seen on August 20.

"Gold might rise in the short-term due to risk appetite," said Gnanasekar Thiagarajan, director with Commtrendz Research.

Buying is advised on dips to 30,450-30,500, with a target of 30,850 rupees, and a stop loss of 30,300, said Thiagarajan.

Reviving physical buying could also aid sentiment.

The weddings and festivals season has started in India, but the government plans to restrict gold buying by announcing more measures in addition to a 50 percent hike in import duty to keep a lid on its bloating current account deficit.

Silver also edged lower, but could recover in the course of the week.

The silver contract for March delivery on the MCX was 0.47 percent lower at 58,145 rupees per kg.

"Silver looks good due to smart industrial recovery," said Thiagarajan, adding buy silver on dips to 57,800 rupees, for a target of 58,800.

(Reporting by Siddesh Mayenkar; Editing by G.Ram Mohan)

FILED UNDER:

Reuters Showcase

GDP Growth

GDP Growth

India revises up 2013/14 GDP growth to 6.9 percent.  Full Article 

Adani Restructuring

Adani Restructuring

Adani hives off power, ports businesses to boost growth.  Full Article 

Bank of Baroda

Bank of Baroda

Q3 net profit down 69 pct on higher provisions  Full Article 

Trading Fees

Trading Fees

BSE slashes fees in FX derivatives battle with NSE  Full Article 

SpiceJet Turnaround

SpiceJet Turnaround

SpiceJet board approves up to $243 mln share sale plan  Full Article 

Currency Market

Currency Market

RBI urges companies to hedge FX exposure  Full Article 

Banking Sector

Banking Sector

Banks say no room to cut lending rates, thwarting RBI easing  Full Article 

ICICI Results

ICICI Results

ICICI sets quarterly record profit as Q3 net rises 14 pct  Full Article 

Reuters Poll

Reuters Poll

RBI seen holding rates steady on Tuesday, minority of analysts expect cut  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device  Full Coverage