Gold for June delivery up marginally, prices expected to decline

MUMBAI: Gold for June delivery traded marginally up by Rs 11 at Rs 26,841 per 10 gm at noon but analysts cited Comex data and restrictions at home while forecasting a further correction.

The August contract, at Rs 25,919, traded at a Rs 922 discount to the June contract. This indicates that on Friday the futures market expects prices correcting to that level after two months.

"Lack of overseas demand, witnessed in Comex prices from June to February contracts trading at virtually the same level of $1,258 per troy ounce (on Friday), and high import duty has queered the pitch for the price, which, if things don’t change, could correct to Rs 25,000 per 10 gm in two months," said Suresh Nair, director, Admisi Commodities.

However, Nair expects international prices to rise if import duty is reduced even by two percentage points from the current 10% as that would encourage fresh buying in India.