Mumbai: India gold demand picked up slightly as prices fell for a second day on Monday as traders continued to replenish stocks to meet festive demand, dealers said.
“We did a few deals since morning, but dollar/rupee is not acting in favour,” said a dealer with a private bank in Mumbai.
The most-active October gold contract was 0.36% lower at Rs14,841 per 10 grams at 2:05pm, extending Friday’s fall of 0.3%.
A weak rupee makes the dollar-quoted asset expensive locally. The Indian rupee dropped to its lowest in nearly a month, weighed down by losses in the stock market, other Asian units and the dollar’s strength against the euro and other high yielding currencies.
Dealers said India’s buying appetite would be boosted if prices declined further.
“We have 20-25 orders at $920 (an ounce),” said another dealer with a state-run bank. “If rupee also favours, then it could boost buying.”