Mumbai: Gold futures were steady on Friday afternoon near their lowest level in a month, in step with overseas markets, although a firm rupee at its highest in two months weighed on sentiment, analysts said.
The most-traded gold for August delivery on the Multi Commodity Exchange (MCX) was trading 0.18% lower at Rs 21,864 per 10 grams at 12:52pm, steady near the lowest level seen since 2 June. The contract had shed more than a percent in the previous session.
Overseas gold prices held just below $1,500 an ounce in Europe, little changed from a week before as Greece’s approval of a key austerity package diminished the precious metal’s appeal as a haven from risk, although slight gains in the euro lent support.
The rupee climbed to its highest level in nearly two months, buoyed by robust dollar inflows, higher local shares and strong Asian peers.
Physical buying edged up as traders continued to book bargains below the keenly-watched $1,500 an ounce. Buying was slow earlier this week due to a seasonal lull in demand.
“Buying is good, we must have covered for 300-400 kg from yesterday, even the rupee is acting in good support,” said a dealer with a state-run bullion importing bank. Dealers said premiums charged were steady at $1.5 an ounce on London prices.
Farmers, the traditional buyers, usually divert their savings on farm equipment and pesticides for summer-sown crops from gold and silver in monsoon period.