Satyam scandal puts Gold in selling pressure

January 13, 2009

Commodity Online
MUMBAI: Volatile stock market in the wake of India's biggest accounting scandal involved IT company Satyam Computer Services led to steady declines in gold futures in the Indian commodity exchanges.

As the markets closed on Tuesday, gold futures at MCX slipped after a higher opening on sustained selling. Analysts said gold futures also fell thanks to the recovery in rupee. Open interest for Feb gold on MCX was at 13,941 lots, up from 13,808 a day earlier. Volume on Monday was 71.33 kgs.

"Gold is in selling pressure thanks to the Satyam scandal," said Anil Mishra, a gold futures analyst in Mumbai.

Overseas gold furures trading had rebounded on Tuesday on bargain hunting after touching its lowest in a month the previous day, with dealers also noting buying interest from jewellers in Asia ahead of the Lunar New Year holidays later this month.

The benchmark February gold MAUG9 contract traded lower by 71 rupees at 12,923 rupees per 10 grams at 11:39 a.m., after falling 3.2 percent in the previous three sessions.

Traders will now await the outcome of Thursday's European Central Bank meeting to gauge direction in the precious metal complex.

On Tuesday, the Indian rupee recovered from an early slide as gains in the domestic stock market raised hopes for foreign fund inflows. But analysts said broad dollar strength overseas could prevent sharp gains.

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