Mumbai: India gold buying edged higher on Monday afternoon as traders hunted for bargains after overseas prices dropped about 1% in early trade in response to China’s interest rate increase on Saturday.
“People are still holding their old stocks, though a few bookings are going on. I covered for 70 kgs at $1,384-1,386 (an ounce),” said a dealer with a state-run, bullion-importing bank in Mumbai.
International spot gold fell to a one-week low of $1,371.10, before recovering to $1,384.00 an ounce, down over $1 from the previous close.
China’s central bank raised interest rates on Saturday for the second time in just over two-month as it stepped up its battle to rein in stubbornly high inflation.
However, in the domestic market, the most-active February gold on the Multi Commodity Exchange (MCX) was trading at Rs20,509 per 10 grams, up 0.15% at 1:39 pm.
The contract had gained 0.20% in the previous session.
Dealers said traders would now refrain from taking positions hoping for price falls ahead as wedding season neared its end.
India’s new demand season for retail sales would start from mid-January after the Makar Sankranti harvest festival, when new farm incomes and weddings encourage people to buy gold.