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Gold demand retreats as rupee weakens

Gold demand retreats as rupee weakens
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First Published: Tue, Jul 07 2009. 01 53 PM IST
Updated: Tue, Jul 07 2009. 01 53 PM IST
Mumbai: India gold demand fell on Tuesday afternoon after an early-morning pick-up as the rupee eased locally, making the dollar-quoted yellow metal expensive, dealers said.
“There was a little bit of buying in the morning, but traders are not willing to enter into deals as rupee has weakened,” said a dealer with a state-run bank in Mumbai.
India gold futures reversed early losses to trade higher as the local rupee weakened against the dollar.
Rupee weakened tracking the domestic shares which pared early gains and weighed down by the dollar’s gains versus majors overseas.
Dealers and traders said the increase in import duty on gold bars will further drag down demand, already hit by high prices and the slowdown.
“Fresh imports may take a beating due to this,” said another dealer with a private bank.
Finance minister Pranab Mukherjee announced in the budget for 2009/10, import duty on gold bars is being raised to Rs200 ($4.1) per 10 grams from Rs100 earlier.
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First Published: Tue, Jul 07 2009. 01 53 PM IST
More Topics: Markets | India | Gold | Bullion | Commodity |