Mumbai: India’s gold buying remained weak on Friday as buyers awaited for lower prices in the midst of the wedding season, with a weak rupee making the imported yellow metal expensive, dealers said.
“There are enquiries but no buyers...,” said Pinakin Vyaas, chief manager-treasury with IndusInd Bank in Mumbai.
“As the rupee has depreciated so heavily, the costing is getting affected,” said Vyaas, adding “and people don’t have any clue about where the rupee is headed.”
The benchmark April contract was 0.91% higher at Rs15,386 per 10 grams at 2:29pm, after hitting a high of 15,444 earlier, largely supported by a weak rupee.
A weak rupee makes the imported yellow metal expensive. The Indian rupee weakened to an all-time low of $51 per dollar in afternoon trade on Friday, weighed down by heavy dollar demand from importers to meet month-end commitments and losses in local shares.
“Volumes should pick up if it (gold) falls to 14,500,” said a dealer with a state-run bank in Mumbai. “No one wants to buy huge quantities and get stuck with high-priced stocks,” he said.
India gold purchases have slowed to a trickle ever since prices moved above the $900-mark overseas and Rs13,500 locally.
No gold has been imported into India so far in February because prices are at record highs in rupee terms, the head of Bombay Bullion Association (BBA) said on Friday.
Gold imports nearly halved to 400 tonnes in 2008 in India, the world largest consumer, from an annual average of around 700-800 tonnes per annum.