Mumbai: India gold prices fell by over 4% on Friday, triggering a pick-up in physcial offtake as traders executed their deals to replenish stocks for the ongoing wedding season that would last till December-end.
“The old orders in place are getting filled, I must have done over 100 kgs since morning,” said Pinakin Vyas, chief manager-treasury, IndusInd Bank in Mumbai.
The most traded December gold contract was trading at Rs17,486 per 10 grams, down 2.84% at 2:38pm, after hitting a low of Rs17,262 earlier.
The contract had struck a record high of Rs18,047 in the previous session.
But a weaker rupee weighed on traders sentiment, they added.
“People are not initiating new orders as they are waiting for the rupee to get stronger... cost wise it is still expensive,” said another dealer with a state-run bank in Mumbai.
The partially convertible rupee was at Rs47.045/47.060 per dollar, near a three-week low of Rs46.75 hit in early deals and well down from Thursday’s close of Rs46.44/45 on fears the recent huge foreign buying of stocks could dry up.
“Probably the next level for them to iniate orders would be $1,125 (an ounce),” said the dealer.
India’s gold imports so far in November were around 15-18 tonnes, lower than 34 tonnes in November 2008, the head of a leading trade body said.