Mumbai: Gold futures recovered partly on Wednesday afternoon following firm overseas markets, though a stronger rupee kept the upside in prices limited, with traders eyeing further fall in prices, analysts said.
The most-active April gold on the Multi Commodity Exchange (MCX) was trading 0.21% higher at Rs20,685 at 2:27 pm, recovering from the previous two-day fall.
“Traders want lower prices, a fall below Rs20,500 could be of help,” said a dealer with a state-run bullion importing bank.
Overseas gold rose on firmer equities and upheaval in Libya, but further gains were seen hindered by tightening monetary policy in some regions that could erode bullion’s appeal as a hedge against inflation.
The rupee, which plays an important role in determining the landed cost of the dollar-quoted yellow metal, rose marginally aided by domestic share gains and dollar inflows.
The high demand period when a lot of weddings are scheduled is currently underway in India, which imported a record of a little over 900 tonnes during last year.