MUMBAI: Gold futures treaded water on Tuesday as support from rising crude oil was offset by a strong rupee back home, analysts said. Investors
would now await the U.S. job report to gauge the direction in the precious metals complex.
The most-traded August contract was 0.04 percent lower at 14,603 rupees per 10 grams at 11:38 a.m. Oil prices jumped more than 2 percent to an eight-month high above $73 a barrel as a sudden spike in Brent buying pinned on fund positioning ushered out the market's best quarterly gain since 1990.
Gold is considered as a safe hedge against inflation, while crude oil stokes price increases, resulting in the two commodities moving in tandem. The Indian rupee rose to its highest in two weeks on Tuesday as shares followed gains in Asian stock markets, which could result in more foreign money entering the market.
A strong rupee weakens local gold prices as much of the yellow metal in India is imported and paid for in the U.S. currency. "Gold would consolidate in its regular range (14,400-14,800) and either side break-out is expected," said Pranav Mer, an analyst with India Infoline.
"MCX August contract is expected to consolidate and trade in the ranges of 14,300-14,700 (rupees) levels," said Debjyoti Chatterjee, associate vice-president, ADMISI Commodities.
Open interest for August gold on MCX was at 13,748 lots, up from 13,506 a day earlier. Volume on Monday was 26.07 kg. Following are gold prices in rupees per 10 grams on the Multi Commodity Exchange of India Ltd. at 11:38 a.m.
