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Dec 7, 2009
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India gold futures seen extending losses

By
Reuters
Published
Dec 7, 2009

MUMBAI (Reuters) - India gold futures may extend losses this week on continued profit-taking triggered by a strong dollar, dimming the yellow metal's appeal as an alternative investment, analysts said.



The most-traded February gold contract on the Multi Commodity Exchange was trading 1.65 percent lower at 17,294 rupees per 10 grams at 3:21 p.m..

It had hit a one-week low of 17,210 rupees, a level last seen on Nov. 30, earlier in the session.

"We have seen one way till 18,000 rupees in gold, so there might be profit-taking in the week to 17,000 (rupees) due to strength in dollar," said Priyank Upadhyay, head of research with Commtrendz Research.

The dollar also hit a five-week high against a basket of currencies on Monday 7 December, extending a climb that began after Friday 4 December's better-than-expected U.S. jobs data.

The data showed the United States shed 11,000 jobs in November, confounding forecasts for 130,000 job losses.

The contract shed more than 3 percent in the last two trading sessions, after gaining 13.6 percent since November.

"Higher RSI (Relative Strength Index) is signalling weakness in gold. Selling could be initiated at 17,520/17,500 rupees, with a target of 16,800 rupees," said Parag Joshi, an analyst with Way 2 Wealth Securities.

The RSI is a price-following oscillator that ranges between 0 and 100. A popular method of analyzing the RSI is to look for a divergence in which the security is making a new high, but the RSI is failing to surpass its previous high.

(Reporting by Siddesh Mayenkar; Editing by Prem Udayabhanu)

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