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Gold falls for 3rd day; traders stay away

Gold falls for 3rd day; traders stay away
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First Published: Mon, Feb 14 2011. 03 57 PM IST
Updated: Mon, Feb 14 2011. 03 57 PM IST
Mumbai: Gold extended losses for a third session on Monday weighed by a strong rupee, but traders were unwilling to book deals, awaiting greater falls ahead to stock up for the wedding season, dealers said.
The most-active gold for April delivery was trading 0.16% lower at Rs 20,308 per 10 grams at 1:43pm, extending the previous two session’s 0.4% fall.
The contract struck a low of 20,288 rupees, a level last seen on 8 February.
“There are no much deals at current rate of $1,360 (an ounce),” said a dealer with a state-run, bullion-dealing bank in Mumbai.
The Indian rupee strengthened as a more than 1% rise in domestic shares calmed jittery nerves about capital outflows, while gains in other regional peers also helped sentiment.
Dealers said gold supply, which was facing difficulty with heavy snowing in refining areas and lower carry over stocks, had eased though premiums remained at an elevated levels of upto $3 an ounce over London prices.
“Premiums are still high at $2.5-3 (an ounce), though supplies are okay,” said the dealer.
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% of global demand for jewellery, making it the world’s biggest consumer.
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First Published: Mon, Feb 14 2011. 03 57 PM IST
More Topics: Markets | India | Gold | Commodity | Bullion |