Mumbai: India gold futures prices edged lower on Tuesday tracking weak international markets, but traders stayed away from the local spot market due to unaffordable prices, dealers said.
The most active June contract was 0.17% lower at Rs14,563 per 10 grams at 3:53pm.
Gold eased in Europe on Tuesday as the dollar recovered from the lows it hit late last week versus a basket of currencies, curbing interest in the metal as an alternative asset.
“Futures prices are down just a little but spot continues to stay high..this is not going to attract demand,” said a dealer with a private bank. “Besides, a weak rupee will continue to support prices,” he said.
The Indian rupee held at the day’s low in afternoon trade on Tuesday, mirroring losses in domestic shares, while gains in the dollar versus major currencies also added to the downward pressure.
Most traders expect demand coming in at sub-14,000 rupee levels.
“We expect buying interest coming in at prices less than Rs14,000,” said Haresh Acharya, head of bullion desk, at Parker Agrochem, Ahmedabad.
Dealers said gold demand has receded after having picked up for two weeks following better-than expected Akshaya Tritiya sales, an auspicious day to buy gold, as traders replenished stocks for the wedding season.
India’s wedding season lasts till June end.