India gold futures ease on overseas weakness

Enlarge Photo A worker shows gold biscuits at a precious metals refinery in Mumbai in this March...

Mon, May 12 11:53 AM

MUMBAI (Reuters) - Indian gold futures eased on Monday tracking overseas weakness, but the market may recover later in the day on fresh domestic demand, analysts said.

"It's just following the global market. Weak oil prices also pulled down the market," said Gnanasekar Thiagarajan, director, Commtrendz Research.

Overseas gold fell on Monday, erasing early gains, as the dollar recovered against major currencies after a sell-off late last week, while crude oil slipped slightly from record peaks above $126 a barrel.

Gold usually has an inverse relationship with the dollar as the two compete for investors.

The market could recover in the later part of the day due to some fresh domestic demand, said Kunal Shah, an analyst with Motilal Oswal Commodities Broker Pvt Ltd.

Traders would be closely watching the US Federal Budget data for the month of April along with currency markets for further cues on the movement of the yellow metal, Shah said.

Open interest for June gold on MCX was at 7,419 lots, down from 7,472 the previous session. Volume on Saturday was 1.3 kg.

Following are gold prices in rupees per 10 grams on the Multi Commodity Exchange of India Ltd. at 11:36 a.m. :

Contract Current price Net change

======================================================

June 11,847 -43

Aug 11,901 -45

For a technical look at gold double click (www.reutersindia.net/gold.htm)

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