Mumbai: Demand for gold in India, the world’s top buyer, rose slightly for the first time in almost a week on Friday, as a 5.5% drop in prices over five sessions enthused buyers, dealers said.
“Today demand is better compared to yesterday. Jewellers were buying, but still some buyers are hoping for a bigger fall and are on the sidelines,” said a Mumbai-based dealer with a private bank dealing in bullion.
The most-active February gold on the Multi Commodity Exchange was 0.11% lower at Rs 27,501 per 10 grams by 3:36pm as a stronger rupee outweighed gains in the world market. The contract has fallen 5.5% so far this week.
International spot gold staged a strong rally on Friday, snapping four sessions of losses with possibly its biggest one-day gain this month, as a smooth Spanish bond auction and upbeat U.S. jobs data supported sentiment.
The rupee plays an important role in determining the landed cost of the dollar-quoted yellow metal. The Indian rupee jumped more than 2% on Friday and was on track to post its biggest single-day rise in more than two years after the central bank took steps to stem the currency’s plunge to a series of record lows.
Wedding season demand has tapered off and will re-start in mid-January to last through March.