This Article is From Feb 06, 2014

Gold futures ease from 2-month high on rupee strength

Gold futures ease from 2-month high on rupee strength

Indian gold futures eased from their highest level in two months, weighed by weak overseas leads and a stronger rupee.

The most-active gold for February delivery on the Multi Commodity Exchange (MCX) was 0.92 per cent lower at Rs 29,525 per 10 grams, falling from a high of Rs 29,849, a level last seen on November 20, 2013.

Silver for March delivery was 1.38 per cent lower at Rs 44,596 per kg on the MCX.

The rupee, which strengthened on Tuesday, plays an important role in determining the landed cost of the dollar-quoted yellow metal.

"Gold will continue to remain on downside due to FOMC meeting," said Madhu Nagraj, said an analyst with Karvy Comtrade.

An improving economy prompted the Fed to announce a cut last month in its bond-buying stimulus by $10 billion, and the US central bank is widely expected to make a similar reduction in a two-day policy meeting that begins on Tuesday.

Selling is advised at Rs 29,560/29,580, for a target of Rs 29,410, with a stop loss at Rs 29,680, Mr Nagraj said.

Indian gold imports may have fallen 70 per cent in the final quarter of 2013 from 255 tonnes in the year-ago period and are expected to be half the usual levels at 500-550 tonnes in 2014 if new import rules are maintained, said a top trade body official.

Copyright @ Thomson Reuters 2014