Mumbai: India gold traders stayed away from taking fresh positions on Wednesday as prices rose by about 1% in the previous session, even as a strong rupee lifted sentiment, dealers said.
“Deals are not happening due to yesterday’s increase in prices,” said a dealer with a private bank in Mumbai.
India’s festival season starts with Rakshabandhan on Wednesday, when gold-buying begins to pick up.
The most-traded October contract was 0.17% higher at Rs14,918 per 10 grams at 1:23pm, after hitting a one-week high in the previous session.
“The rupee is acting in the favour but the yesterday’s price jump is keeping them (buyers) away,” said another dealer with a state-run bank.
A strong rupee makes the dollar-quoted asset cheaper.
The Indian rupee rose, buoyed by weakness in the US unit versus majors overseas, but pared some of its rise in mid-morning trade as local shares turned negative after having risen nearly 1% early.
“I have plenty of advanced orders in the range of $935-940 (an ounce),” said the dealer with the private bank.