Mumbai: The gold futures nudged higher on Wednesday on a weak rupee and on a slight rise in overseas prices, while demand in the local physical market was subdued, dealers said.
At 3:45 pm, the most-active gold for June delivery on the Multi Commodity Exchange (MCX) was trading 0.11% higher at Rs21,282 per 10 grams.
“Demand was very weak for jewellery. There was some buying happening in bars and coins segment, but most people were waiting for a significant correction,” said a Mumbai-based dealer.
The wedding season is underway in India, when demand for the yellow metal usually goes up.
The rupee, which plays an important role in determining the landed cost of the dollar-quoted yellow metal, fell on Wednesday.
International gold rose on Wednesday, recovering after its biggest one-day drop in nearly a month as the dollar retreated amid expectations the US Federal Reserve will maintain its accommodative monetary policy for now.
India’s demand for gold should be robust in 2011 despite the likelihood of higher prices, pushed by geopolitical tensions, according to the World Gold Council.