Mumbai: India gold traders continued to trickle in on Wednesday as the rupee strengthened, making the dollar-quoted asset cheaper, to build up stocks in the middle of the festival season, dealers said.
“The rupee has appreciated so it is making gold cheaper for traders. They are just buying bare minimum for festivals,” said a dealer with a state-run bank in Mumbai. “I sold around 250 kgs since yesterday evening.”
“Volumes are expected to pick up due to festive demand,” said another dealer with a private bank.
The most-traded October contract was up 0.30% at Rs15,864 per 10 grams at 1:53pm.
The Indian rupee hit a six-week high in early deals on Wednesday as dollar demand from importers and weaker domestic shares offset the weakness in the dollar overseas.
Dealers said the underlying demand is still strong, with many traders staying on the sidelines to replenish stocks.
“I have plenty of orders in the range of $990-1,000 (an ounce),” said another dealer with a private bank.
India, the world’s largest consumer of the yellow metal, is in the midst of the festival season, with Dussera on Monday and Diwali and Dhanteras next month, which is expected to revive sagging gold sales.
The World Gold Council’s January to June figures show India’s gold imports fell 55% to 126.7 tonnes from 282.3 tonnes a year earlier.