Mumbai: Gold steadied at its highest level in one week on Tuesday afternoon as support from firm overseas leads was offset by a strong rupee, though demand still stayed weak.
The most-active April contract on the Multi Commodity Exchange (MCX) was trading 0.04% higher at Rs 20,961 per 10 grams, after hitting a high of 20,974 rupees, a level last seen on 14 March.
“There aren’t any deals. Gold in the local spot market is available at a discount of Rs 6,000 per kg,” said a dealer with a state-run bullion importing bank.
Overseas gold edged higher fed by concerns over inflation unleashed by high oil prices and an increased safe-haven appeal amid growing tensions in the Middle East following western powers’ air strikes on Libya.
The rupee was marginally stronger, supported by positive local shares, a strong euro and higher regional peers. The rupee plays an important role in determining the landed cost of the yellow metal, which is quoted in dollars.
Wedding season is underway in India, the world’s biggest gold consumer, when demand for bullion goes up. India’s gold imports in October-December rose 30% to 265 tonne.