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Gold seen scaling yet another peak

India's gold futures are likely to extend gains for a fourth week to another peak on concerns about a possible US debt default as the debt ceiling talks in Washington stalled.

business Updated: Jul 25, 2011 13:49 IST

India's gold futures are likely to extend gains for a fourth week to another peak on concerns about a possible US debt default as the debt ceiling talks in Washington stalled.

"We are bullish on gold and silver due to concerns about breakthrough in the debt deal," said Subhrasom De, an analyst with Karvy Comtrade.

The most-active gold for August delivery <MAUc1> on the Multi Commodity Exchange (MCX) was trading 0.83 % higher at 23,291 rupees per 10 grams at 11:47 a.m., after hitting a contract high of 23,336 rupees.

The contract had gained 6.5 % in the previous three weeks.

Clocks are ticking towards the August 2 deadline for U.S. deficit talks, while President Barack Obama and congressional leaders struggled late on Sunday to break a partisan impasse.

Buying could be done at 23,100-23,120, targeting 23,550 rupees, said Nikky Joshi, an analyst with Karvy Comtrade.
Investors would watch out for U.S. GDP data on Thursday for direction.

However, subdued physical buying could limit the upside in prices. India, the world's biggest buyer of bullion, is in a seasonally lean demand period, when farmers divert their savings to meet agricultural expenses.

Silver futures are likely to extend gains tradking gold.

Silver for September delivery on the MCX was trading 1.44 % higher at 60,349 rupees per kg.

Buy silver at around 59,500 for a target of 61,530, with a stop loss of 58,800 rupees, said Karvy's Joshi.