Mumbai: Gold buying continued on Monday afternoon after prices fell 1.8% in the previous week, as traders sought to stock in anticipation of the upcoming harvest festival and on wedding demand, dealers said.
“The good response has been continuing from last week. I sold about 1 tonne of gold last week,” said a dealer with a state-run bullion importing bank in Mumbai.
The most-active gold for February delivery was trading 0.38% higher at Rs 20,450 per 10 grams at 12:59pm, still down 2.3% from the record high of Rs 20,924 struck last month.
International spot gold edged higher, after losing 3.5% in the first week of 2011, as fears over the euro zone debt crisis buoyed appetite for bullion, and bargain hunting in the physical market provided support.
“I am expecting good sales to continue today as well at $1,370-1,375 (an ounce),” said the dealer with the state-run bank. Weddings in India, the world’s largest consumer of yellow metal, will re-start next month.
Gold traders also awaited direction from the rupee, which plays an important role in determining the landed cost of the dollar-denominated yellow metal.
The rupee held its ground, supported by firm Asian peers and a sharp drop in the country’s trade deficit in December.