Gold prices crash in India spot & futures markets

January 14, 2009

Commodity Online
MUMBAI: Are gold prices headed for a major crash in the Indian markets? Gold has not been doing well this week in the Indian futures and spot markets and the story continued on Wednesday.

At India’s leading commodity exchange, the Multi Commodity Exchange, gold futures slipped for a fifth day. Analysts said that firmer rupee against dollar is bringing down the gold prices.

”It looks there is little appeal for gold in the Indian futures market this week as the prices have been falling. Gold prices will continue to slide in the Indian market this week because of external pressures from rupee and dollar,” said bullion analyst Varun Srivastava.

The benchmark MCX gold February contract was lower by 17 rupees at 12,957 rupees per 10 grams at 11:41 a.m., after falling 3.4 for the previous four sessions

He said investors are also not interested in taking big positions in gold thanks to the European Central Bank's (ECB) meet on Thursday that is expected to cut interest rates by 50 basis points to fight the economic meltdown.

In the Indian physical market, gold prices dropped Rs 100 per 10 gm to Rs 13,300 on the bullion market. Gold prices had slipped 1 per cent in London as oil dropped and the Euro extended losses against the dollar, while physical demand was seen softening.

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