India Gold Seen Extending Losses This Week.

India gold futures are likely to extend losses for another week, falling further from the lowest level in 13 weeks, on waning safe-haven appeal, though rising physical demand ahead of the wedding season could limit the downside, analysts said.

The most-active gold contract for April delivery MAUc2 on the Multi Commodity Exchange (MCX) was trading 0.15 percent lower at 20,137 rupees per 10 grams, after hitting a low of 20,065 rupees.

Scenes in Egypt, where protesters intensified their campaign to force President Hosni Mubarak to quit, have encouraged some safe-haven buying of gold, although this support is unlikely to last long, analysts said.

Gold may trade in the range of 20,050-20,500, said Tejas Seth, senior analyst, SMC Global.

India's January gold imports are seen rising on softer prices and as food inflation boosts farm incomes, fuelling demand for gold in the world's biggest market for the metal.

The median forecast in a Reuters poll of 10 industry experts showed gold imports this month may have risen 6.6 percent from a year earlier to 36.25 tonnes.

The winter harvesting season is underway in India and is expected to leave more disposable income with rural households, which contribute significantly to gold demand.

In India, which accounts for 20 percent of global demand for jewellery, gold is widely gifted in religious celebrations and weddings.

Source : reuters.com