MUMBAI (Reuters) - Indian gold futures are likely to fall further from their lowest level in a week in the next few sessions on expectations of a stronger dollar, which acts as an alternative to the yellow metal.
At 6 p.m., the actively traded gold for April delivery on the Multi Commodity Exchange (MCX) was 0.14 percent lower at 30,597 rupees per 10 grams, after hitting a low of 30,530 rupees, a level last seen on February 4.
“Even a mild strengthening of the dollar could lead to a sell-off in precious metals. This indicates underlying weakness in gold,” said Gnanasekar Thiagarajan, director of Commtrendz Research.
Selling is advised in gold on rallies to 30,650 rupees, with a stop-loss of 30,800, targeting 30,250, said Thiagarajan.
The dollar index rose to a one-month high against a basket of currencies on Tuesday, helped by its gains versus the euro.
The dollar often moves in the opposite direction to gold as the two compete for investments overseas.
The most-active silver for March delivery on the MCX was 0.39 percent lower at 57,439 rupees per kg.
Selling is advised in silver on rallies to 57,800 rupees, with a stop-loss of 58,200, targeting 56,700, said Thiagarajan.
Reporting by Siddesh Mayenkar; Editing by Sunil Nair