Monday, 24 November 2008

India gold seen up on safe-haven buying, weak rupee

MUMBAI (Reuters) - India's gold futures are expected to rise this week on safe-haven buying, a weak rupee and hopes of a rise in oil prices, analysts said.

"It has outperformed all other assets...liquidity problems are also easing which may bring fresh buying," said Harish Galipelli, head of research, Karvy Comtrade Ltd.

Gold has rallied since a crisis struck global financial institutions, diverting funds away from stocks as investors turned to the safe-haven appeal of the yellow metal.

The benchmark December contract has gained about 11 percent so far in November, while the 30-share BSE Index fell 9 percent during the period.

A weak rupee is also supporting the sentiment, said Debjyoti Chatterjee, associate vice president, MAPE ADMISI Commodity Research.

India, the world's largest gold consumer, imports most of its demand. A weak rupee makes imports costlier and pushes up domestic prices.

Another major indicator would be the OPEC meet on Nov. 29, which may boost the bullion prices further, said Devarsh Vakil, head of research, Anagram Capital Ltd.

Venezuela said on Sunday the Organization of the Petroleum Exporting Countries should cut supply further, while Iran made similar remarks on Monday. OPEC oil ministers meet for informal talks in Cairo on Nov. 29.

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