Gold prices hit record high, may breach Rs. 20K by November

Wednesday, 6 October 2010 19:08 - - {{hitsCtrl.values.hits}}

MUMBAI (Reuters): Gold prices in India extended gains on Wednesday morning to a record high tracking strong overseas markets, and analysts expect the bullish trend to continue, and see gold breaching Rs. 20,000 per 10 grammes by November.

However, a strong rupee, which makes the dollar-quoted yellow metal cheaper, kept the upside limited, analysts said. December gold on the Multi Commodity Exchange (MCX) struck a new record of Rs. 19,615 per 10 grammes, surpassing the previous peak of Rs. 19,537 struck in the previous session.

At 10:53 a.m., the contract was trading just off the record high at Rs 19,571, up 0.30 percent. "We may end-up at around Rs. 20,000 by post-Diwali, and move along with a rally driven by heavy fund flows, investment buying overseas," said Harish Galipelli, head of research, JRG Wealth Management.

Overseas gold hit a fresh record high, the eighth in the past nine consecutive sessions, riding on dollar weakness and market anticipation on more quantitative easing from the U.S. Federal Reserve.

"Gold has seen a consolidation break-out at 19,350, buying could be done at 19,400, with a stop loss of 19,200, targeting 20,000 in one month," said Amrut Deshmukh, senior analyst with Way 2 Wealth Securities.

Domestic gold moves in tandem with international markets, and rupee also plays an important role in determining the landed cost of the imported yellow metal.