Mumbai: Gold rose by more than 3.5% on Tuesday afternoon, rebounding from their lowest level in more than seven weeks, as traders built stocks for the festival season and global prices inched up after four consecutive sessions of losses.
At 3:10 p.m., the most-active gold for October delivery on the Multi Commodity Exchange (MCX) was 3.77% higher at Rs 26,656 per 10 grams, recovering from Monday’s low of Rs 24,992, a level last seen on 8 August.
“People are buying with an investment purpose, thinking of profiting from lower prices. They are comfortable buying at below 27,000 rupees levels,” said Harshad Ajmera, proprietor with wholesaler in Kolkata, JJ Gold House.
An inauspicious period for gold buying will end on Tuesday, and a series of festivals will start in India with Dusshera on 6 October, followed by Dhanteras and Diwali later in the month, when demand for gold goes up.
A firm rupee, which plays a key role in determining the landed cost of the dollar-quoted yellow metal, kept the upside in prices limited, a dealer said.
The rupee was up in afternoon trade helped by positive sentiment in domestic equities but a choppy euro restricted a further rise.
Global gold prices extended gains to rise 2% as the dollar fell against a basket of currencies, and as the previous session’s early rout tempted price-sensitive buyers back to the market.