Mumbai: Gold rose by more than 1% on Monday, in line with a similar jump in global prices, pushing physical traders on the sidelines in the middle of a festival season when demand is firm, dealers said.
The most-active gold for December delivery on the Multi Commodity Exchange (MCX) was 1.41% higher at Rs26,685 per 10 grams, after gaining 1.4% in the previous three sessions.
US gold futures jumped more than 1% to $1,640 an ounce as weaker equities and worries about the global economy drew investors to the precious metal.
A weaker rupee, which plays an important role in determining the landed cost of the dollar-quoted yellow metal, also aided sentiment.
Physical traders, seeking to stock for the upcoming festival season, went to the sidelines.
“Buying is down as prices have jumped by $40 (an ounce),” said Haresh Acharya, head of bullion desk, Parker Bullion, adding “even rupee is up 1%, denting demand.”
Demand is likely to gain pace ahead of festivals including Dhanteras, the biggest gold buying festival, in October in the world’s biggest importer of bullion. Demand could remain firm as this is also a busy marriage season.