Mumbai: India’s gold traders continued to pick bargains for a third day in a row on Friday as prices remained at their 2-“ month low, but a weaker rupee weighed on sentiment, dealers said.
“There is activity in the market at around $1,100 (an ounce), it started on Wednesday late-evening... they are not buying in full force as the rupee is weak,” said a dealer with a state-run bank in Mumbai dealing in bullion.
The most-traded gold February contract was 0.54% lower at Rs16,440 per 10 grams at 2:13pm, extending losses for a third consecutive session. The contract struck an intra-day low of Rs16,403, a level last seen on 3 November.
Gold had shed 2.4% in the previous two sessions.
The Indian rupee hit its lowest level in more than two weeks, tracking a sharp drop in the domestic stock market, but some dollar selling emerged from exporters helping prevent a further decline.
A weak rupee makes the dollar-quoted asset expensive.
International spot gold was trading at $1,095.95/1,096.75 an ounce as against the previous close of $1,094.20/1,095.00.
“Traders mostly will look at buying below $1,070 levels..,” said another dealer with a private bank in Mumbai.
“Most of the forward traders are looking at $1,080 levels to cover their short positions,” said the state-run bank dealer.
India imported 300-350 tonne of gold in 2009, higher that the previous estimate of a little over 200 tonne, the head of the Bombay Bullion Association said on 4 January.