Mumbai: Gold extended gains on Thursday afternoon in step with overseas markets and on a weaker rupee at home, pushing physical traders to the sidelines ahead of a slew of festivals starting later this month, analysts said.
The most-active gold for October delivery on the Multi Commodity Exchange (MCX) was trading 0.31% higher at Rs 24,130 per 10 grams, nearing the previous day’s record of Rs 24,245.
Global gold, pressured by a surging dollar as Japan intervened to rein in its currency, scaled back earlier gains but remained firmly supported by worries about the widening euro zone debt crisis and slowing global growth.
The rupee weakened on Thursday as payments for oil imports picked up, while the dollar’s rise after Japan intervened to stem the yen’s strength also weighed. ‘
The rupee plays an important role in determining the landed cost of the yellow metal, which is quoted in dollars.
“Demand is not great... its muted due to continuous rise in prices,” said a dealer with a private bullion importing bank in Mumbai.
Retail gold demand is expected to gain pace in August, when the festival and wedding seasons start in the world’s biggest consumer of bullion.