New Delhi: Gold demand in India, the world’s top buyer, was weak on Monday as a period considered inauspicious sidelined buyers despite prices falling to lows not seen in seven weeks and even sharper falls on global markets, bank dealers and jewellers said.
The most-active gold contract for October delivery on the Multi Commodity Exchange (MCX) was trading 3.22% lower at Rs 25,857 per 10 grams, after hitting an intra-day level of 24,992 rupees, the lowest since 8 Augut.
“In the morning there was some demand. Traders were buying at around $1,560 per ounce, but now demand is negligible,” said a dealer with a Mumbai-based private bank dealing in the bullion. “Prices are too volatile.”
Spot gold in the world market was set for its biggest three-day loss in 28 years on Monday, as investors fled commodity markets in a scramble to secure cash in the face of mounting fear over the impact of a potential Greek debt default on the rest of the euro zone.
The rupee fell, trailing weak domestic equities and the euro’s slide.
The rupee plays an important role in determining the landed cost of gold, which is quoted in dollars.
“Retail demand was weak. People were not buying despite the price fall,” said Babu Alapatt, managing director at retailer Alapatt Gold Pvt Ltd in southern Kerala state.
Shradh, an inauspicious period when Indians pay homage to their ancestors and refrain from new investments, ends on Tuesday. Indians tend to avoid buying gold during such periods.
Festival and wedding demand in India, where brides are often weighed down by gold jewellery to demonstrate wealth, will peak in October and November, before tapering off in December.