Mumbai: India’s gold demand edged up on Monday on a festival, but higher prices due to international cues and a weak rupee restricted the volumes, traders and dealers said.
“There are sporadic deals happening on account of Akshaya Tritiya,” said a dealer with a private bank in Mumbai.
“The volumes are not that great as prices have jumped and also due to a weak rupee.”
India, the world’s largest consumer of the yellow metal, celebrates Akshaya Tritiya on Monday, which is considered as an auspicious occasion to buy gold.
“Retail volumes are not very great... so far the reports are not encouraging from various centres,” said Daman Prakash, director with MNC Bullion in Chennai.
The most watched June contract was 0.86% higher at Rs14,750 per 10 grams at 2:59pm, after gaining 2.3% in the last four sessions.
Overseas gold, which guides the local markets, steadied in Europe after rising to a four-week high earlier in the session, as equities fell on concerns over the prospect of a global flu pandemic, which boosted interest in bullion as a haven.
The Indian rupee traded lower in afternoon session after having risen for seven straight weeks, as a see-sawing share market failed to provide clarity on fund flows, while a stronger dollar overseas also hurt.
Chart-based buying also aided sentiment, analysts said.
Traders had been stocking the yellow metal in anticipation of festive demand since April 1 in order to take advantage of lower prices.
Futures ruled a tad above Rs14,000 in early April, down 12.7% from an all-time high of 16,040 struck on 20 February.
India’s gold sales stood at 48.99 tonnes, down 11% on year, according to the World Gold Council.
Traders and dealers said jewellers were unwilling to enter into fresh deals due to violent fluctuation in prices.
“They would rather wait-and-watch than place advance orders,” said another dealer with a state-run bank.