vishnuvega
10-06-2008, 06:34 PM
Gold futures fell on Tuesday tracking weakness in overseas markets, but firm oil prices may restrict the losses, analysts said.
"The domestic market is just following the global weakness," said Shailendra Kumar, head of research, Sharekhan Commodities Pvt Ltd. Overseas gold extended losses on Tuesday and dropped below $890 an ounce after the US dollar gained on expectations of a possible interest rate hike, reducing the metal's appeal as an alternative investment.
However, crude oil price is still hovering around its all-time high, which is supporting the metal, said Gnanasekar Thiagarajan, director, Commtrendz Research. Oil rose to $135 a barrel on Tuesday, reversing some of the previous session's heavy $4 drop.
Crude oil and gold move in tandem as one signals inflation, while the other is a hedge against rising prices. In macro-economic data, traders would be closely watching US International Trade data for April, to be out later in the day, along with currency markets to check further direction, Thiagarajan said. Open interest for August gold on MCX was at 7,153 lots, up from 7,052 the previous session
"The domestic market is just following the global weakness," said Shailendra Kumar, head of research, Sharekhan Commodities Pvt Ltd. Overseas gold extended losses on Tuesday and dropped below $890 an ounce after the US dollar gained on expectations of a possible interest rate hike, reducing the metal's appeal as an alternative investment.
However, crude oil price is still hovering around its all-time high, which is supporting the metal, said Gnanasekar Thiagarajan, director, Commtrendz Research. Oil rose to $135 a barrel on Tuesday, reversing some of the previous session's heavy $4 drop.
Crude oil and gold move in tandem as one signals inflation, while the other is a hedge against rising prices. In macro-economic data, traders would be closely watching US International Trade data for April, to be out later in the day, along with currency markets to check further direction, Thiagarajan said. Open interest for August gold on MCX was at 7,153 lots, up from 7,052 the previous session