Mumbai: Gold demand at Indian spot market remained subdued on Tuesday, hammered by a rise in prices due to firm overseas markets and a weak rupee, just ahead of the lean buying season.
The most-active June delivery on the Multi Commodity Exchange (MCX) was up 0.40% at Rs29,080 per 10 grams by 6 pm.
“Buyers are not interested in purchases above Rs29,000. They are waiting for prices to correct,” said a Mumbai- based dealer with a private bank dealing in bullion.
“Jewellers are holding back purchases. They want to restock at lower level. They are not in hurry as monsoon season is approaching,” he said.
Demand usually drops between June and mid-August when there are no major festivals and marriages. Farmers will also be busy with planting during the rainy season.
Global gold rose back above $1,575 an ounce on Tuesday, tracking gains in the euro as the single currency edged off two-year lows against the dollar.
The rupee, which plays an important role in determining the landed cost of the dollar-quoted yellow metal, fell on Tuesday, snapping three sessions of gains.
Gold demand in India is likely to moderate in 2012 as higher inflation trims disposable income at a time prices are stubbornly high on a weak rupee, the head of the World Gold Council in the country said earlier this month.