New Delhi: India gold prices traded higher on Monday as strong oil prices spurred inflation concerns even as local demand remained slack in a lean period, dealers said.
The most-active August contract was 0.44% higher at Rs14,828 per 10 grams at 1:33pm.
The four-month monsoon is a lean period for weddings, one of the key drivers of gold demand. But a series of festivals starting August-end and resumption of the wedding season is expected to boost gold sales from next month.
“The present condition is likely to persist till August,” said a dealer with a private bank in Mumbai.
Oil rose above $64 a barrel, extending last session’s 2.5% gains, bolstered by a rally in Asian stocks and gain in other major currencies on hopes of a global economic recovery.
Gold and crude prices mirror each other as oil drives inflation and the yellow metal is a hedge against price rise.
“There are no buyers. We have just sold 10 kgs so far since morning,” said a dealer with a state-run bank in Mumbai “We don’t even have advance orders.”