Mumbai: Gold futures fell by about 1.5% on Monday afternoon to hit their lowest level in a week, following a weak trend in the overseas markets and a stronger rupee at home.
The most-active gold for December delivery on the Multi Commodity Exchange (MCX) was 1.27% lower at Rs 27,208 per 10 grams, after hitting a low of Rs 27,152, a level last seen on 25 October.
Spot gold prices dropped nearly 2%, after Japan’s intervention in the currency market triggered a spike in the dollar, spooking precious metals investors and setting bullion up for its biggest one-day drop in four weeks.
The rupee plays an important role in determining the landed cost of the yellow metal, which is quoted in dollars.
The rupee recouped all early losses aided by improvement in the euro and some dollar inflows, although volatile local shares limited the recovery.
Physical traders booked the yellow metal to stock for the wedding season, which will continue till December. India is the biggest buyer of bullion.
“In India, demand is pretty much there. $1700-$1710 is well supported” and any breach of the support level will be a buying opportunity, s aid a dealer with a private bullion importing bank in Mumbai.