RTRS: India gold futures seen easing on strong dollar
(Reuters) - India gold futures may ease this week weighed by expectations of a strong dollar overseas, and profit-taking, but festive demand in the local market could limit the downside, analysts said.
The most-active October contract was trading 0.16 percent lower at 18,697 rupees per 10 grams at 4:41 p.m., after gaining 4.4 percent in the previous three weeks.
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Prices are still lower than the all-time high of 19,285 rupees struck in early June.
Gold and dollar generally move in opposite direction as the two compete for funds globally. A strong dollar dims the yellow metal's appeal as an alternative investment.
"A higher dollar overseas would be weighing and prices have rallied very fast without any correction, so there would be some profit-taking," said Pranav Mer, senior analyst with Mangal Keshav Commodities.
Supports would be at 18,550/18,500 rupees, while resistance would be at 18,800/18,850, said Mer.
The euro stayed under broad pressure, hurt by concerns over the euro zone economy which have seen short positions in the single currency extended.
Selling could be done at 18,680-18,700, for a target of 18,440, maintaining a stop loss of 18,810 rupees, said Karvy Comtrade in a report.
However, physical buying at dips could limit the downside in gold, they added.
Indian gold demand is set to pick up for the busy festival season, starting with Raksha Bandhan on Aug. 24 and extending till Dhanteras in November, the single biggest gold-buying day.
(Reporting by Siddesh Mayenkar; Editing by Ramya Venugopal)
