RTRS: India gold seen week on liquidity crunch, firm dollar
MUMBAI, Nov 3 (Reuters) - India's gold prices are expected to trade lower this week on concerns over liquidity and a stronger dollar, analysts said.
"Liquidity is still a concern. It will take some time to stabilise," said Harish Galipelli, head of research, Karvy Comtrade Ltd.
The European Central Bank, the Bank of England and the Reserve Bank of Australia are all expected to lower interest rates to protect their struggling economies from the threat of a looming global recession. See [ID:nL3564978]
They are all seen easing by at least 50 basis points. Last week the U.S. Federal Reserve cut its key rate by 50 basis points to 1.0 percent and the Bank of Japan (BoJ) cut its rate to 0.30 percent from 0.50 percent.
The U.S. presidential election on Tuesday is also likely to add more volatility in the market, said Subodh Gupta, an analyst with Anand Rathi Commodities.
Democrat Barack Obama leads Republican John McCain in six of eight key battleground states one day before the U.S. election, including the big prizes of Florida and Ohio, according to a series of Reuters/Zogby polls released on Monday. See [ID:nN03354084]
Investors will likely assess the possibility of quick fiscal stimulus after the election and the risk of protectionist measures or more regulation.
Among the economic indicators this week, Institute for Supply Management (ISM) reports on manufacturing on Monday, non-manufacturing, or service-sector, activity on Wednesday and U.S. employment report on Friday, are also likely to influence the yellow metal, they said.
The following are weekly recommendations for the December contract on the Multi Commodity Exchange of India Ltd. <0#MAU:> in rupees per 10 grams:
Brokerage Recommendation Stop Loss Target ============================================================
Karvy Sell at 11,900 12,150 11,500
Mape Admisi Sell at 11,850 12,000 11,500
Anand Rathi Sell below 11,600 11,800 11,200
* At 6:13 p.m., the December contract on the MCX was trading at 11,662 rupees per 10 grams, down 70 rupees.
(Reporting by Debiprasad Nayak, editing by Prem Udayabhanu)
