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Gold extends gains; buying edges up on strong rupee

Gold extends gains; buying edges up on strong rupee
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First Published: Fri, Feb 18 2011. 03 00 PM IST
Updated: Fri, Feb 18 2011. 03 00 PM IST
Mumbai: Gold extended gains for a fourth session to hit its highest level in nearly a month, tracing overseas leads, but a strong rupee prompted physical traders to stock for the wedding season, dealers said.
“There are deals because of a strong rupee. I covered for 125 kgs at $1,385/1,386 (an ounce),” said a dealer with a state-run bank in Mumbai.
At 2:07pm, the most-traded gold contract for April delivery on Multi Commodity Exchange (MCX) was trading 0.31% higher at Rs 20,580 per 10 grams, after hitting a high of Rs 20,599, a level last seen on 20 January.
The rupee, which steadied at a one-month peak, kept the upside in prices restricted.
Winter harvesting season is underway in India and is expected to leave more disposable income with rural households, which contribute significantly to gold demand. Marriage season has also started and will last through May.
India accounts for 20% of global demand for jewellery, making it the world’s biggest consumer.
Gold imports in the quarter to December rose 30% to 265 tonnes, and a likely increase in import duty is seen in the upcoming budget, the World Gold Council said.
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First Published: Fri, Feb 18 2011. 03 00 PM IST
More Topics: Markets | India | Commodity | Gold | Bullion |