Mumbai: Gold traded steady on Tuesday afternoon, though traders took to the sidelines awaiting price falls amid a lack of supplies, dealers said.
“There are hardly any buyers today. Yesterday I covered for more than 125 kgs at $1,323.80 (an ounce),” said a dealer with a state-run bullion importing bank in Mumbai.
Gold for February delivery on the Multi Commodity Exchange (MCX) was trading 0.12% higher at Rs 19,945 per 10 grams at 1:40pm.
Dealers said the supply constraints could ease, after raising premiums to more than $2 per ounce over London prices, a level last seen in October 2008.
“After the Chinese new year (Feb. 3), probably the supply issue could get solved,” said another dealer with a state-run bullion dealing bank.
India’s January gold imports are seen rising on softer prices and as food inflation boosts farm incomes, fuelling demand for gold in the world’s biggest market for the metal.
The median forecast in a Reuters poll of 10 industry experts showed gold imports this month may have risen 6.6% from a year earlier to 36.25 tonnes.
The winter harvesting season is underway in India and is expected to leave more disposable income with rural households, which contribute significantly to gold demand.
In India, which accounts for 20% of global demand for jewellery, gold is widely gifted in religious celebrations and weddings.