Gold futures may surge on inflation

Gold futures, which gained almost 3 per cent last week, are likely to increase by 4-5 per cent and would trade in the range of Rs 12,000-13,050 per 10 gm next week, analyst G Harish, head of the brokerage firm Karvy Comtrade said.

At the international market, the precious metal is likely to trade in a wider range of $860 on the lower end and $960 on the higher end due to firm crude oil prices, which is trading at a higher level and had touched the record high of $139.12 a barrel on Friday, he added.

 

The weak dollar movement that dropped almost by 1 per cent against euro last week would support the rally, he added. Gold prices in India are influenced by the movement of precious metal at the global market.

At mid-afternoon on Saturday, August contract of gold was trading up by 0.96 per cent at Rs 12,543 per 10 gm on Multi Commodity Exchange (MCX).

Last week, gold futures opened lower on the back of firm dollar and falling crude oil prices, but later at the weekend, it recovered, encouraged by gain in US unemployment rate and weakening dollar.

European Central Bank statement that it will maintain the interest rate level at four per cent also supported gold prices, said Bonanza Brokerage's head Commodity Research Tarun Satsangi.

According to Harish, gold is also likely to rise more as deficit rate in the US Trade Balance, which would be released soon, is expected to increase further.

He said the trade balance, which was previously at 58.2 per cent in the negative growth rate, is likely to rise further to 59.7 per cent, would push up gold prices.

The pending home loan sales in the US are also expected to decline, giving further boost to gold prices, he added.

Meanwhile, Satsangi opined that prices of the precious metal on August COMEX (New York Commodity Exchange) are likely to re-test its immediate high of $940.10, touched on May 22, and afterwards it may trade in the levels of $955-960.

On the other side, he said, $860-889 ranges are lending decent support to the prices and weakness can be seen only below these levels.