Mumbai: Gold traders trickled in on Tuesday afternoon to the buying counters as prices eased a tad below the $1,200 an ounce-mark, but a weaker rupee, which makes the dollar-quoted asset expensive, weighed on sentiment, dealers said.
“There is buying, but not as much as what we saw in the last two weeks, they are buying below $1,200 (an ounce),” said a dealer with state-run bullion dealing bank in Mumbai.
Gold held near $1,200 an ounce in Europe as traders took to the sidelines ahead of a monetary policy meeting of the US Federal Reserve later in the session, with a firmer dollar keeping the metal under pressure.
International gold, which guides the domestic market, was trading $1,198.05/1,198.55, down from the previous close of $1,200/1,204.
The rupee fell to its lowest in nearly a week due to the dollar’s rise overseas amid uncertainty whether the US Federal Reserve would signal more easing.
“Unfortunately, rupee is not in support today, there are plenty of deals near the levels of $1,180-1,185,” said another dealer with a private bank in Mumbai, referring to levels last seen on 3 August.
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.
MCX trade halt
Futures trading in commodity bourse, Multi-Commodity Exchange’s platform was not functional in the early session due to technical difficulties.
Trading started at 10:30 am instead of usual 10 am.