Gold futures are likely to extend gains this week on debt concerns in the eurozone, and an expected revival in physical demand ahead of key festivals, analysts said.

At 11:33 am, the most-active gold for December delivery on the Multi Commodity Exchange (MCX) was 0.52% higher at Rs 26,450 per 10 grams.

“There are concerns on euro crisis,” which may lead to recovery in gold,” Subhrasom De, an analyst with Karvy Comtrade, said.

Buying could be done at Rs 26,750, for a target of Rs 27,450/27,600, with a stop loss of below Rs 26,000, said Dey.

Jitters over the spiralling European debt crisis, European banks’ exposure to sovereign debt and a slowing global economy caused investors to cut their bets on risky assets in the July-September quarter, sending the euro down almost 10 cents versus the dollar over the period.

European Central Bank member Christian Noyer said on Monday it is unrealistic to expect an increase in Europe’s bailout fund beyond what was agreed in July, but that he is open to schemes that would allow leveraging to expand capacity.

Analysts said reviving physical demand for the yellow metal could also aid sentiment.

Demand for gold in India, the world’s biggest consumer of bullion, will gain pace in October and November due to a series of festivals and the peak season for marriages, before tapering off in December.

Silver prices are likely to extend gains following the yellow metal.

Silver for December delivery was 1.11% higher at Rs 51,750 per kg.

Buying could be done in silver above Rs 54,500, for a target of Rs 57,400/58,200, said Dey. – Reuters