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Gold falls towards Rs 14,000; seen correcting

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Reuters

Posted: Feb 04, 2009 at 1136 hrs IST

Mumbai India's gold futures edged higher to trade near the psychological 14,000-rupee-mark on Wednesday, tracking firm overseas market, but a stronger rupee kept the upside limited, analysts said.

At 11:07 a.m., COMEX gold for April delivery was 0.78 per cent higher at $899.5 an ounce taking support from higher crude oil.

"Gold may trade lower later in the session on continued profit-taking," said Harish Galipelli, head of research with Karvy Comtrade in Hyderabad.

The benchmark April contract lost 2.9 per cent in last two trading sessions as on profit-taking after the yellow metal witnessed its contract high of 14,450 rupees per 10 grams last week.

The contract traded 6 rupees higher at 13,995 rupees at 11:30 a.m.

"Gold would dip to 13,800 rupees before resuming its uptrend," Galipelli added.

"A healthy correction has taken place and it has made the uptrend more safe," said a technical analyst with a Mumbai-based commodity brokerage.

Buying is recommended at 14,000 rupees, with a target of 14,600 and with a stop loss of 13,800 rupees, added the technical analyst.

Open interest for April gold on MCX was at 18,977 lots, up from 18,772 a day earlier. Volume on Tuesday was 71.41 kgs.

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