Gold's upward flight likely to be stalled by stronger Indian rupee

Gold  |  2013-06-13 06:32:47   |   By

Research report indicate that gold in India are likely to move in tandem with the global trend generally, but any emerging strength in Indian rupee can limit the upside in prices

NEW DELHI (Scrap Monster) : Research report indicate that gold in India are likely to move in tandem with the global trend generally, but any emerging strength in Indian rupee can limit the upside in prices.

The World Bank in its semi-annual Global Economic Prospects Report lowered its global economic growth forecast to 2.2% in 2013, down from 2.4% projected during early January. The Asian equities tumbled upon the world body degrading growth outlook for India and China. The fall in equities and the weakness in dollar will boost gold’s safe haven appeal.

Apart from the above, the single fact that the outflows from SPDR Gold Trust- the world’s largest gold-backed ETF have dried up, signals that investor confidence is returning to gold, though at slow pace. The gold holdings in SPDR Gold Trust remained unchanged on Tuesday.

The innate weakness in the emerging stock markets and the halt in outflows from gold-ETFs are likely to provide firm support to gold prices. The gold in international market is expected to move up. The prices of gold in India are expected to follow suit, but a stronger rupee could limit the upside in the prices of yellow metal, whose rates are denominated in dollar terms.