August 30, 2011 / 7:22 AM / 8 years ago

India gold seen gaining on bargain buying

MUMBAI (Reuters) - India gold futures are likely to extend gains this week on bargain buying after the yellow metal shed more than 5 percent from its peak in limited volume trade, analysts said.

A woman holds gold bangles at a jewellery shop in Kolkata October 14, 2009. REUTERS/Jayanta Shaw/Files

The most-active gold for October delivery on the Multi Commodity Exchange (MCX) last traded 0.43 percent higher at 26,854 rupees per 10 grams at 12:18 p.m., down 5.2 percent from its record of 28,284 rupees struck on Aug. 23.

“The trend has not turned bearish and bargain-buying could be seen at the bottom,” said Aurobinda Prasad, head of research, Karvy Comtrade.

Buying could be done at 26,650 rupees for a target of 27,200, maintaining a stop loss of 26,300 rupees, Prasad said.

Investors await U.S. consumer confidence data for August and minutes from the Federal Reserve’s last committee meeting on Aug 9 for more clues on divisions among board members over further stimulus measures.

Physical buying could keep prices higher. Festival and wedding season has started in India, the world’s biggest consumer, and will peak in October before tapering off in December.

Silver prices are likely to trade in a range after losing more than 4 percent in the last week.

Silver will continue to trade sideways and in the range of 58,500-63,000 for the week, said Pranav Mer, senior analyst with Mangal Keshav Commodities.

Silver for September delivery on the MCX was trading 0.38 percent lower at 60,930 rupees per kg.

Silver would likely trade in the range of 61,900-63,500 rupees, said Karvy’s Prasad.

Reporting by Siddesh Mayenkar; Editing by Harish Nambiar

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