Gold demand stays weak as rupee weakens

Gold demand stays weak as rupee weakens
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First Published: Wed, Jul 08 2009. 02 17 PM IST
Updated: Wed, Jul 08 2009. 02 17 PM IST
Mumbai: India gold demand remained slack on Wednesday as the rupee weakened against the dollar, making the dollar-quoted yellow metal expensive, dealers said.
“There is not much demand as a weak rupee is weighing on sentiments,” said a dealer with a Mumbai-based private bank. The rupee has weakened more than 2 percent this week.
The most traded August contract trimmed early losses on a weak rupee. It was down 0.16% to Rs14,580 per 10 grams at 1:37pm, after hitting a low of Rs14,561 earlier.
The Indian rupee hit its lowest in two weeks as local shares fell in tandem with regional markets, triggering concerns over sustainability of foreign fund inflows.
Traders expect slackness in demand to continue as a seasonally lean period is underway.
“Similar conditions would continue till August, but if there is any big price dip, then traders may stock for the upcoming festivals.”
Monsoon is considered a lean season in India as fewer weddings take place during the period. But a series of festivals and auspicious days for weddings is expected to boost gold demand from August-end till the end of the year.
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First Published: Wed, Jul 08 2009. 02 17 PM IST
More Topics: Markets | India | Gold | Commodity | Rupee |