Mumbai: Gold extended losses from its peak on Wednesday afternoon as investors continued to take profits after a record rally, however, a weaker rupee kept the downside limited, dealers said.
The most-active gold for October delivery on the Multi Commodity Exchange (MCX) was trading 0.61% lower at Rs 27,430 per 10 grams at 2:55pm, extending previous session’s more than a percent losses.
The contract had struck a record of Rs 28,284 on Tuesday, after gaining 9.5% in the last seven sessions till Monday.
COMEX gold for December delivery was trading 0.54% lower at 2:19pm, while spot gold rebounded more than 1 percent after posting its worst daily drop in 18 months, as risk appetite retreated after Moody’s downgraded Japan’s debt rating and strong buying interest in Asia’s physical market lent support.
The rupee plays an important role in determining the landed cost of the yellow metal, which is quoted in dollars.
Physical buying edged up as jewellers awaited further price falls to re-stock for festival and wedding season.
“It was good yesterday, today it is a bit slow, though prices are lower than yesterday,” said a dealer with private bullion-importing bank in Mumbai. “It’s wait and watch for jewellers. Some are worried about a sharp pullback in prices and are keeping away from re-stocking”
India’s wedding and festival demand will gain pace and peak in October before tapering off in December.
Gold buyers in India, the world’s largest consumer of the yellow metal, are investing in it on expectations prices may rise, but imports are likely to fall as limited budgets buy less gold, the head of India’s biggest importing bank told Reuters on Saturday.