Rupee appreciation may prevent sharp upside in Gold prices

MUMBAI-INDIA (Oct 21)  A spot gold price decreased by 0.25 percent on Friday’s trading session on the back of rise in risk appetite in the global markets. However weakness in DX and expectations among the investors that the US Federal Reserve may continue with its loose monetary policy cushioned sharp downside in the currency. In the Indian Markets, gold prices fell by 0.2 percent taking cues from Intl spot gold prices. However, depreciation in the Indian Rupee cushioned sharp downside in the prices. Gold prices touched an intraday low of 29300/10gms and closed at 29480/10gms.

Outlook: We expect spot gold prices to trade on the mixed note on the back of struggling Dollar Index coupled with rise in risk appetite in the global markets. Expectations among the investors that the US Federal Reserve may continue with its loose monetary policy may support gold to trade positive because gold appeal as a hedge against inflation may increase. Whereas, SPDR Gold trust holding are at lowest since 2009 and demand from top consumer India has been curbed which may act as a negative factors for the gold prices. In the Indian Markets, appreciation in the Indian Rupee may prevent sharp upside in the prices.