Monday, April 29, 2013

Gold seen extending gains from two-week high
(Reuters) - Gold futures in India, which hit the highest level in two weeks on Friday, could extend gains on a weak dollar ahead of further monetary easing in the United States.

Weak U.S. growth data has raised expectations the Federal Reserve will keep its bond buying at $85 billion a month, while the European Central Bank is widely expected to announce an interest rate cut when it meets on Thursday.

Accommodative policy is supportive for gold as printing of money tends to be inflationary.

"Overall gold will remain on the upside on loose monetary policy stance by the U.S.," said Sumit Mukherjee, an analyst at Karvy Comtrade.

The actively traded gold for June delivery was 0.17 percent lower at 27,144 rupees per 10 gram on the Multi Commodity Exchange (MCX), after hitting a high of 27,447 rupees on Friday, a level seen on April 15.

Gold may trade in a range of 26,300-27,800 rupees, said Mukherjee.

However, lower physical demand from India after the buying frenzy following a 20 percent drop in prices from the peak, could limit the upside in prices. India will celebrate Akshaya Tritiya next month, while weddings will continue till June-July.

Silver for May delivery was 0.17 percent higher at 45,118 rupees per kg on the MCX.

Silver may trade in a range of 43,400-48,000, said Mukherjee.

(Reporting by Siddesh Mayenkar; Editing by Subhranshu Sahu)

Courtesy: Reutes