Mumbai: India gold buying retreated on Monday afternoon as global prices recovered and traders sought lower rates to stock for the second round of festivals starting August, dealers said.
A weak rupee also made the dollar-denominated yellow metal expensive, they added.
“It’s a totally dull scenario, there was activity last week on dips below $1,200 (an ounce),” said Pinakin Vyas, assistant vice-president, with IndusInd Bank, a gold importer.
International gold, which guides the domestic market, was trading at $1,208.50/1,209.25 an ounce, recovering from a low of $1,185.05 struck last week. Prices were still below the last close of 1,211.85/1,212.85. “A dip below $1,200 could re-activate the market,” said a dealer with a state-run bullion dealing bank.
The Indian rupee weakens after data shows May factory output grew at 11.5%, below 165 that was forecast in a Reuters poll.
India, which accounts for more than 20% of global demand, will celebrate the Hindu festival of Raksha Bandhan on 24 August, and Janmasthami and Ganesh Chaturthi in September.