Mumbai: Gold extended gains for another session on Wednesday to meet the highest level in about a week, stoked by firm overseas markets, analysts said.
The most-active gold for February delivery on the Multi Commodity Exchange (MCX) was 0.32% higher at Rs29,047 per 10 grams, after hitting a high of Rs29,088, a level last seen on 1 December.
Investors were also cautious after ratings agency Standard & Poor’s fired a second warning shot at the euro zone in 24 hours, threatening to cut the credit rating of its financial rescue fund.
A stronger rupee kept the upside in prices limited. The rupee plays an important role in determining the landed cost of the yellow metal, which is quoted in dollars.
Silver futures also edged higher following the yellow metal. The most-active silver for March delivery on the MCX was 0.40% higher at Rs57,200 per kg.
Weakness in demand continued as prices hit the highest level in a week. Weddings are underway in India, the world’s biggest buyer of bullion.
“There is a bit of slackness in demand as weddings have decreased,” said Harshad Ajmera, proprietor with Kolkata-based JJ Gold House. December is traditionally a high selling season for gold because of weddings.