Gold prices in India seen recovering after massive fall

MUMBAI Tue Apr 16, 2013 3:04pm IST

1 of 2. A saleswoman arranges a gold necklace inside a jewellery showroom in Kochi April 16, 2013.

Credit: Reuters/Sivaram V

Related Topics

MUMBAI (Reuters) - Gold futures in India, which hit the lowest level in more than 18 months on Tuesday, may stage a recovery as key technical indicators point to the yellow metal entering oversold territory, according to analysts.

Gold in India, the world's biggest buyer of the metal, has shed 21 percent from the record high of 32,464 rupees for 10 grams struck in November, spreading panic among investors and importers.

"Extremely overdone technical indications suggest a possible recovery in coming days," said Gnanasekar Thiagarajan, director, Commtrendz Research, adding that a recovery to 27,450/28,000 rupees is possible.

The Relative Strength Index (RSI) for MCX gold is placed below 20. Normally, when RSI goes below 30, it tends to get oversold and a possible upward correction is seen.

The most-active gold for June delivery on the Multi Commodity Exchange (MCX) was 67 rupees higher at 25,701 rupees per 10 grams, after falling to a low of 25,270 rupees, a level last seen in late September, 2011.

Buying is advised on dips to 25,300, with a stop loss of 25,100, targeting 26,000 rupees, said Thiagarajan.

Global gold hit an 11-month high in October last year after the U.S. Federal Reserve announced its third round of aggressive economic stimulus, raising fears the central bank's money-printing would stoke inflation.

But the gain was erased by a rally in equities, talks that the Fed could soon end its bullion-friendly bond buying programme, and concerns other indebted euro zone countries could follow Cyprus' plan to sell bullion reserves to raise cash.

Silver for June delivery was 0.48 percent lower at 44,166 rupees per kg.

Silver may trade in the range of 42,000-47,000, said Aurobinda Prasad, head of research, Karvy Comtrade.

(Reporting by Siddesh Mayenkar; Editing by Jijo Jacob)

FILED UNDER:

INTERNAL SECURITY

REUTERS SHOWCASE

Setback For Sahara

Setback For Sahara

Supreme Court defers verdict on Sahara plea to raise more debt on hotels  Full Article 

SpiceJet Crisis

SpiceJet Crisis

SpiceJet says fleet grounded on lack of fuel  Full Article 

Drug Patents

Drug Patents

Novartis sues Cipla over respiratory drug Onbrez   Full Article 

Boost for Tata Steel

Boost for Tata Steel

Tata Steel restarts key iron mines amid shortage  Full Article 

Reuters Poll

Reuters Poll

BSE Sensex to hit 32,980 by December 2015  Full Article 

India Outlook

India Outlook

ADB trims growth forecasts for developing Asia, says India to grow 5.5 pct in 2014  Full Article 

Real Estate

Real Estate

HDFC to raise $500 mln real estate private equity fund - sources  Full Article 

Banking Sector

Banking Sector

Japan banks to bulk up India presence on improving ties   Full Article 

U.S. Spending Bill

U.S. Spending Bill

Obama signs bill $1.1 trillion government spending bill  Full Article 

Reuters India Mobile

Reuters India Mobile

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