Mumbai: India gold buying remained subdued for a second day on Thursday as traders sought lower prices to stock up for festivals due later in the month, and a weaker rupee also made the dollar-quoted asset expensive, dealers said.
“There is nothing much today, even yesterday was equally bad,” said a dealer with a state-run bullion dealing bank in Mumbai.
International gold held steady after a drop in prices from a 2-week high spurred light buying from jewellers in Asia, but firm stock markets were likely to weigh while holdings on the ETF fell slightly.
International gold, which guides the domestic market, was trading at $1,194.80/1,195.60 an ounce as against the previous close of $1,194.60/1,198.20.
“Buying could be seen below $1,190 (an ounce),” said another dealer with a private bank.
Rupee inched lower as broad gains in the dollar versus major currencies weighed, but a firm domestic sharemarket limited any rapid decline. A weaker rupee made the dollar-quoted asset cheaper.
“If prices stay below $1,200, we might witness good sales in August as it was in July,” said Harshad Ajmera, proprietor with JJ Gold House, a Kolkata-based wholesaler. “Overall banks have sufficient stocks despite the ongoing summer holidays for (gold) refineries.”
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.