Mumbai: India gold extended losses for a third straight session on Wednesday to hit its a more than 2-month low, spurring physical buying as traders sought to stock up for upcoming festivals, dealers said.
“Buying is definitely there. Traders, who bought 10 kgs a few days back, are now buying 40 kgs,” said Harshad Ajmera, proprietor, of Kolkata-based JJ Gold House, which offered to sell the yellow metal for Rs17,900 per 10 grams.
Gold futures was trading 0.06% lower at Rs17,743 per 10 grams at 1:30pm, after hitting a low of Rs17,705, a level last seen in early May. The contract has shed 2.8% in the previous two sessions.
A strong rupee also helped sentiment by making the dollar-denominated asset cheaper.
The Indian rupee strengthened to a two-week high boosted by the dollar’s losses against major currencies but a further rise was averted by a choppy domestic sharemarket, which failed to provide direction on capital flows.
“There could be more buying if prices fall to about $1,150 (an ounce),” said dealer with a state-run bank in Mumbai.
Indian gold demand is set to pick up for the busy festival season, starting with Raksha Bandhan on 24 August, and extending till Dhanteras in November, the single-biggest gold buying day.