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Gold extends gains to over 1-week high

Gold extends gains to over 1-week high
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First Published: Tue, Oct 04 2011. 03 02 PM IST
Updated: Tue, Oct 04 2011. 03 02 PM IST
Mumbai: Gold hit its highest level in more than a week, rising more than 1% on Tuesday afternoon in a fifth session of gains, following a similar trend in the global market and with a weaker rupee against the dollar, dealers said.
The most-active gold for December delivery on the Multi Commodity Exchange (MCX) was 0.78% higher at Rs 26,941 per 10 grams, after hitting a high of Rs 27,044, a level last seen on 24 September.
The contract has gained 3% in the previous four sessions.
Overseas gold gained 1% as investors dumped equities and turned to bullion on growing fears that a Greek default could trigger another global recession.
The rupee, which weakened against the dollar for a third day, affects the landed cost of gold, whose global price is quoted in dollars.
Physical buying for gold, however, continued to retreat as traders sought better bargians to stock for imminent festivals -- traditional times for purchases. Silver demand picked up after a 16% fall in prices from 1 September - 4 October, pushing premiums to 30-35 cents over London prices.
“Buying has slowed, it is not to the extent it was a week ago,” said Ketan Shroff, director with wholesaler Pushpak Bullion.
“This (silver demand) is causing supply issues, with airline capacity being stretched. And premiums are unsurprisingly on the rise,” said Edel Tully in a note on Tuesday.
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First Published: Tue, Oct 04 2011. 03 02 PM IST
More Topics: Markets | India | Gold | Commodity | Bullion |