Mumbai: India gold buying retreated on Monday afternoon after a two-week trot, as prices traded above the three-week high and well above the $1,200 an ounce-mark, with dealers expecting premiums to ease.
“It’s not a promising start to the week, while last two weeks were very good, we might have imported 0.5 tonnes last week only,” said a dealer with a state-run bank which deals in bullion.
International gold rose to near three-week highs, as investors sought perceived safe haven assets, after US jobs data stoked fresh economic fears on Friday.
Gold was trading at $1,208.70/1,209.50 an ounce as against the previous close of $1,203.30/1,207.30, after hitting a high of $1,209.55, the loftiest level since 15 July.
Dealers expect premiums, which were at $1.50 for an ounce of gold on Monday, to ease on steady demand and easing supply constraints.
“Premiums will come back to normal levels in a few days of about 25 cents,” said the dealer.
However a strong rupee kept the upside restricted in the yellow metal, which is quoted in dollars.
Indian gold demand is set to pick up for the busy festival season, starting with Raksha Bandhan on 24 August, and extending till Dhanteras in November, the single-biggest gold buying day.
“Prices will have to come down below $1,200 and rupee will have to appreciate below 46 for demand to pick-up again,” said another dealer with a private bank.
Following were the prices being quoted by HDFC Bank in rupees in the spot market at 10:15 a.m.