Mumbai: India’s gold demand abated on Friday after picking up for the previous two sessions and traders awaited lower prices to stock up before the festival and wedding season starts, dealers said.
“There was demand yesterday and the day before, but it is quiet today as they (traders) want lower prices,” said a dealer with a private bank in Mumbai.
“There are some advanced orders in the range of $925-930 (an ounce),” said another dealer with a state-run bank.
Dealers and traders hope that upcoming festivals and weddings, beginning August-end, would revive sagging gold demand already reeling under the throes of an economic slowdown and high prices.
The most-active August contract was almost flat at Rs14,697 per 10 grams as pressure from a strong rupee was offset by strong crude oil prices.
The Indian rupee strengthened as a firm start in the share market raised expectations for more capital inflows, and weakness in the dollar versus majors overseas also underpinned sentiment. A strong rupee makes the dollar-quoted asset cheaper.
Oil extended gains well above $67 a barrel, after a 5.7% jump in the previous session on U.S. data and earnings which renewed hopes of an economic recovery and drove up equity and commodities markets. Gold is considered as a safe hedge against inflation.