Mumbai: India gold prices edged lower pressured by a strong rupee on Tuesday afternoon, with slackness in domestic demand expected to continue in a sesonally lean period, dealers said.
The most-active August contract was 0.15% lower at Rs14,587 at 1:56pm, after hitting a low of Rs14,555 earlier.
The Indian rupee rose to its highest in two weeks, tracking a weaker dollar overseas, and traders watched local share prices for cues on capital inflows.
A strong rupee makes the dollar-denominated yellow metal cheaper locally.
“Gold demand is not much even though rupee has appreciated. Demand is expected to remain silent for a couple of weeks due to a slack season,” said a dealer with a private bank in Mumbai.
India is in a lean season as fewer weddings take place during monsoons. But a series of festivals and auspicious days for weddings is expected to boost gold demand from August-end till the end of the year.
“The sales have been bad for the earlier part of the year. Only a correction below $900 (an ounce) could see interest re-emerging,” said another dealer with a state-run bank.
India is estimated to have imported about 50 tonnes of gold in the first five months of the calendar year as against 115 tonnes last year.