India Gold Seen Sideways After >3% Fall

Source:

"The safe-haven premium will continue to taper off. . ."

India gold futures may trade sideways this week after losing 3% since the start of Monday's session as pressure from easing safe-haven appeal is seen offsetting a weaker dollar overseas, analysts said.

The most-traded June gold contract on the Multi Commodity Exchange (MCX) was trading 2.55% lower at 17,476 rupees per 10 grams, after hitting a low of 17,358 rupees earlier.

"It will consolidate after volatile movements, range seen is 17,20017,900 rupees for the week," said Pranav Mer, senior analyst with Mangal Keshav Commodities.

European Union finance ministers agreed on Monday on emergency measures worth 500 billion euros ($670 billion) to prevent Greece's debt crisis causing turmoil in other Eurozone countries, dimming the yellow metal's safe-haven appeal.

The yellow metal's rally witnessed last week was mainly on the back of debt concerns in the Eurozone.

"The safe-haven premium will continue to taper off, and gold might see a range of 17,30017,700 rupees," said Gnanasekar Thiagarajan, director, Commtrendz Research.

The euro rallied from last week's 14-month low against the dollar after European Union leaders agreed on an emergency loan package to prevent Greek's debt crisis from spreading through the region.

Gold and dollar often move in opposite directions as the two compete for funds overseas.

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