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Gold extends gains to 7-week high, demand retreats

Gold extends gains to 7-week high, demand retreats
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First Published: Tue, Feb 22 2011. 02 30 PM IST
Updated: Tue, Feb 22 2011. 02 30 PM IST
Mumbai: Gold futures extended gains for eighth consecutive session to hit its highest level in over seven weeks helped by a weaker rupee, deterring physical traders from booking deals at a crest, dealers said.
“At every high there is resistance and people are now edgy about the 21,000-rupee mark,” said a dealer with a state-run bank in Mumbaithat imports bullion.
The most-active gold for April delivery <MAUc1> on the Multi Commodity Exchange (MCX) was trading 0.15 percent higher at 20,762 rupees per 10 grams, after hitting 20,790 rupees, a level last seen on Jan. 4.
The rupee fell further on Tuesday afternoon, after touching a seven-week high in the previous session, as weak local shares and a broadly strong dollar overseas dented sentiment. The rupee plays an important role in determining the landed cost of the yellow metal quoted in dollars. [INR/]
Winter harvesting season is underway in India and is expected to leave more disposable income with rural households, which contribute significantly to gold demand. Marriage season has also started and will last through May.
India accounts for 20 percent of global demand for jewellery, making it the world’s biggest consumer.
India’s gold imports in Oct-Dec. rose 30 percent to 265 tonnes, and an increase in import duty is likely in the upcoming budget, the World Gold Council said on Feb. 17. [ID:nSGE71G049]
Following were the prices being quoted by HDFC Bank in rupees in the spot market at 1:15 p.m. <INBULL03>:
Tuesday Monday
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Gold .999/10 grams 20,820 20,713
Silver .999/kg 51,765 51,470
Following were prices in rupees on the Multi Commodity Exchange of India Ltd. at 1:58 p.m. <0#MAU:>:
Contract Current price Net change
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Apr gold 20,772 +42
Mar silver 49,400 -890 (Reporting by Siddesh Mayenkar; Editing by Rajesh Pandathil) REUTERS
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First Published: Tue, Feb 22 2011. 02 30 PM IST
More Topics: Markets | India | Economy | Gold | Bullion |