Mumbai: India’s gold buying retreated on Wednesday afternoon after picking up from last week as prices revisited the keenly-watched Rs18,000 mark, with traders eyeing the movement in the rupee for direction, dealers said.
“On Monday we saw good sales, but by yesterday evening it turned dull... but today only exporters are covering fearing that prices may move higher,” said a dealer with a state-run bank in Mumbai, which deals in bullion.
“However, there are no domestic deals...,” said the dealer.
The most-active October contract on the Multi Commodity Exchange (MCX) extended the previous day’s gains to trade 0.69% higher at Rs18,075, a level last seen on 27 July.
The contract had gained 0.5% in the previous session.
The Indian rupee was trading with a weak bias on Wednesday tracking lower regional peers, but traders were watching the dollar’s moves versus major currencies and the local sharemarket for further direction.
The rupee plays an important role in determining the landed cost of the yellow metal, which is quoted in dollars.
“They would buy if prices come to $1,180 (an ounce),” said another dealer with a private bank.
Indian gold demand is set to pick up for the busy festival season, starting with Raksha Bandhan on 24 August, and extending till Dhanteras in November, the single-biggest gold buying day.