Mumbai: Gold snapped a three-day gaining streak on Monday following similar trend globally. A strong rupee also made the dollar-quoted yellow metal cheaper, triggering a slight pick-up in physical demand ahead of key festivals.
At 1:14pm, the most-active gold for October delivery on the Multi Commodity Exchange (MCX) was trading 1.95% lower at Rs 27,099 per 10 grams
Global spot gold fell more than 1% reversing a rally of 3.2% in the previous session, as investors, faced with uncertainties over the US Federal Reserve’s stimulus plans, decided to take some money off the table.
The rupee strengthened, supported by a sharp rise in local shares, Asian peers and gains in the euro, with corporate dollar sales, possibly from a large domestic engineering conglomerate, also aiding.
The rupee plays an important role in determining the landed cost of the yellow metal, which is quoted in dollars.
A price dip attracted physical buying from traders, who were on the sidelines.
“Demand has improved in the last few days,” said a dealer with a private-run bullion importing bank in Mumbai, adding premiums are steady at $1.1/1.4 over London prices.
India’s wedding and festival season demand will gain pace and peak in October before tapering off in December.