Mumbai: Gold eased a tad from the highest level in two weeks on Thursday afternoon, but traders still chose to keep away from placing fresh deals waiting for more price falls, dealers said.
“I have covered for only 10 kg from morning at $1,360 (an ounce)... even the rupee has depreciated,” said a dealer with a state-run bullion importing bank in Mumbai.
The most-active gold for April delivery on the Multi Commodity Exchange (MCX) was trading 0.10% lower at Rs 20,380 per 10 grams, easing from a high of Rs 20,432 in the previous session, a level last seen on 24 January.
A weaker rupee kept the downside in prices limited, dealers said. The rupee plays an important role in determining the landed cost of the yellow metal, which is quoted in dollars.
Dealers said suppliers hiked premiums charged on London prices to $2.2-$2.5 on limited availablity of the yellow metal after supply issues erupted on execssive snowing in refining areas and lower carry over stocks from last year.
“There is a shortage in supply, some banks are even charging $2.5,” said the dealer.
Winter harvesting season is underway in India and is expected to leave more disposable income with rural households, which contribute significantly to gold demand.
India accounts for 20% of global demand for jewellery, and the next marriage season kick offs in February.