Mumbai: India gold extended losses for a second day on Tuesday weighed by early strength in the rupee, triggering light buying in the physical market as traders braced for festivals, when demand for the yellow metal tends to go up, dealers said.
“There is buying today. I did about 50-60 kgs from morning at $1,274/1,275,” said a dealer with a state-run bank in Mumbai, which deals in bullion.
Gold on the Multi Commodity Exchange (MCX) was trading 0.20% lower at Rs19,063 per 10 grams at 1:14pm, down about 1 percent from the all-time high of Rs19,257 struck on 15 September.
“There are buyers even at these levels as people are bullish on prices... they expect prices to be at 20,000/20,500 rupees by Diwali,” said Suresh Kumar, managing partner, Visakhapatnam-based Visakha Bullion, which caters to markets in Andhra Pradesh.
The Indian rupee rallied to its highest in more than four months early in the day, boosted by surging foreign buying of domestic stocks, but soon met with resistance as importers stepped in to cover their positions.
A strong rupee makes the dollar-quoted asset cheaper for local holders.
India, the world’s biggest buyer of gold, is in the middle of the festive season that will peak with Dhanteras in November, the single biggest gold buying day.