Mumbai: Gold futures extended gains despite steady overseas markets, as prices tracked a weaker rupee, but physical buying was subdued by the high costs, dealers said.
The most-traded gold contract for December delivery on the Multi Commodity Exchange (MCX) was 0.44% higher at Rs 28,547 per 10 grams, after hitting 28,579 rupees, a high last seen in early September.
The rupee weakened, partly as dollar demand from oil importers buoyed the US currency. The rupee plays an important role in determining the landed cost of the yellow metal which is priced internationally in dollars.
Overseas gold prices hovered above $1,790 an ounce, after adding over 2% in the previous session, supported by safe haven demand as worries remained over the euro zone debt crisis.
Physical buying stayed weak as prices hit a two-month high, and traders waited for declines to stock up for the ongoing wedding season.
“Buying is quiet today ... there is not much demand,” said a dealer with a private bank dealing in bullion. He expects buying to come in at $1,770-1,775 an ounce.
The wedding season -- traditionally a time of strong demand for gold - will continue into December in India, the world’s biggest buyer of bullion.