India gold futures may extend gains for a second consecutive week as euro zone economic stablity could trigger safe-haven buying overseas, but slack local offtake could limit the upside, analysts said. MONEY Gold futures on the Multi Commodity Exchange was trading 0.51 percent lower at 18,370 rupees per 10 grams at 4:30 p.m., after gaining 2.6 percent in the previous week, when the yellow metal touched a record high of 18,648 rupees. "There will be safe-haven buying at all levels due to the European problem," said Gnanasekar Thiagarajan, director, Commtrendz Research, adding "range seen is 18,200-18,600 rupees." Fitch cut Spain's credit rating by one notch to AA-plus on Friday, saying the country's economic recovery will be "more muted" than the government forecast due to its austerity measures. "Gold will trade with a positive bias this week on prevailing market condition, buying could be initiated at 18,200 for a target of 18,500 rupees," said Harish Galipelli, head of research with JRG Wealth Management. "Jewellery sales will struggle in the face of record highs, likely to weigh on prices," said Galipelli. Domestic demand in India, the world's biggest consumer, has been slack on near-record prices.. India's gold imports fell an annual 39 percent in May, as record prices hit demand in the world's top consumer at a time when sales were expected to rise because of a Hindu festival.

Source