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Gold steady; physical buying muted

Gold steady; physical buying muted
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First Published: Thu, Aug 11 2011. 04 29 PM IST
Updated: Thu, Aug 11 2011. 04 29 PM IST
Mumbai: Gold futures were steady above Rs 26,000 on Thursday afternoon as support from a weaker rupee offset a decline in the overseas markets, while physical trading was a ‘little muted´.
The most-active gold for October delivery on the Multi Commodity Exchange (MCX) was 0.02% higher at Rs 26,610 per 10 grams at 4:02pm, near the record high of Rs 26,457 struck in the last session.
The rupee fell, weighed by oil importers’ demand for dollars and weak domestic shares, with movements in the euro eyed in the backdrop of debt worries in the region.
The rupee plays an important role in determining the landed cost of the yellow metal, which is quoted in dollars.
Overseas gold fell 1% as buyers took a breather after earlier taking the market up to record highs, with a decision by the CME Group to raise margins on COMEX gold futures taking some of the heat out of appetite for the metal.
Demand was muted as traders got accustomed to the keenly watched level.
“I have covered for 150 kgs... it’s not a bad thing considering it is just five hours of trade and gold is trading above 26,000 rupees,” said a dealer with a state-run bullion importing bank.
Gold demand from India, the world’s biggest buyer of the yellow metal, will gain pace in coming weeks on the back of wedding and festival demand.
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First Published: Thu, Aug 11 2011. 04 29 PM IST
More Topics: Markets | India | Gold | Commodity | Bullion |