Mumbai: Gold steadied on Thursday afternoon, as a stronger rupee restricted the price rise, allowing traders to stock for the wedding season, dealers said.
“Demand is good, I booked around 100 kgs from morning as the rupee is in supportive mode,” said a dealer with a state-run bank in Mumbai.
At 2:50pm, the most-active April contract on the Multi Commodity Exchange (MCX) was trading 0.01% higher at Rs 20,509 per 10 grams, after hitting a high of 20,539 rupees, a level last seen on 20 January.
The rupee extended gains in afternoon session on Thursday tracking a more than 1% rise in domestic shares with firm regional peers also aiding sentiment for the local unit.
The rupee plays an important role in determining the landed cost of the dollar-quoted yellow metal.
“There are deals at $1,366 levels,” 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. Marriage season has also started and will last through May.
India accounts for 20% of global demand for jewellery, making it the world’s biggest consumer.
Gold imports in the quarter to December rose 30 percent to 265 tonnes, and a likely hike in import duty is seen in the upcoming budget, the World Gold Council said.