India gold futures fall on weak overseas mkt, oil

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

Tue, May 13 11:43 AM

MUMBAI (Reuters) - Indian gold futures moved lower on Tuesday tracking a weak overseas market and falling oil prices, but a weak rupee may restrict losses in the later part of the day, analysts said.

"International market is going down and it is pulling down the domestic sentiment," said Pranith Kumar Tunguri, senior analyst with Indiabulls Commodities Pvt Ltd.

Overseas gold slipped on Tuesday, weighed down as a halt in crude oil's climb dented its appeal as a hedge against inflation.

Oil fell more than $1 towards $123 a barrel on Tuesday on profit-taking after a fall in China's oil imports in April, the first on-year drop in 18 months, raised questions over demand in the world's second largest oil consumer.

However, a depreciating rupee is likely to cap losses during the later part of the day, said Kunal Shah, an analyst with Motilal Oswal Commodities Broker Pvt Ltd.

The Indian rupee surrendered early gains on Tuesday, hitting fresh one-year lows as it extended the previous session's sharp fall as banks and companies bought dollars on concerns about a domestic slowdown.

Most of India's gold is imported and a weak rupee makes imports expensive.

Traders would be closely watching U.S. export/import prices and retail sales data for April for further cues, Tunguri said.

Open interest for June gold on MCX was at 7,856 lots, up from 7,606 the previous session. Volume on Monday was 31.3 kg.

Following are gold prices in rupees per 10 grams on the Multi Commodity Exchange of India Ltd. at 11:32 a.m. :

Contract Current price Net change

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

June 11,942 -19

Aug 11,990 -20

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

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