Mumbai: Gold futures fell on Monday afternoon weighed by weak overseas markets and a stronger rupee back home, though physical buyers awaited bigger falls before gearing up for festivals slated later this month, dealers said.
The most-traded August gold on the Multi Commodity Exchange (MCX) was trading 0.53% lower at Rs 23,044 per 10 grams, after hitting a low of Rs 22,965 earlier.
“There were a couple of stray trades despite a stronger rupee. Still people are waiting for the U.S. debt plan and if it gets through, gold may face some pressure,” said Pinakin Vyas, assistant vice-president with IndusInd Bank. “People are still deciding to make inventory plans for festival season.”
Overseas gold fell more than 1% on Monday after US President Barack Obama said lawmakers had reached a deal to cut the country’s deficit, which, if approved, would remove the threat of a default on debt that has driven bullion to a record high.
The rupee was strong in afternoon trade as upbeat local shares and the central bank’s hefty rate increase last week improved outlook on dollar inflows. The rupee plays an important role in determining the landed cost of the yellow metal, which is quoted in dollars.
Retail gold demand is expected to gain pace in August, when the festival and wedding seasons start in the world’s biggest consumer of bullion.