Mumbai: Gold traders in India, one of the world’s top consumers, stayed on the sidelines on Friday as prices rose more than a percent, tracking the overseas market and a falling rupee, dealers said.
The most-active gold for June delivery on the Multi Commodity Exchange (MCX) was up 1.09% at Rs28,838 by 04:00 pm.
“Demand has come down because people were waiting for a correction and all of a sudden prices went up yesterday. If prices go up further then we may see more fall in demand,” said Ketan Shroff, a director at Pushpak Bullion, a wholeseller in Mumbai.
Gold demand in India is likely to moderate in 2012 as higher inflation trims disposable income at a time prices are stubbornly high on a weak rupee, the head of the World Gold Council in the country told Reuters on Thursday.
In the overseas market gold prices rose, building on the previous session’s hefty gains.
The rupee, which fell to a record low against the dollar for the third consecutive day on Friday, plays an important role in determining the landed cost of the dollar-quoted yellow metal.
The wedding season is underway in India, the world’s biggest buyer of the yellow metal, and will taper off by the end of the month. The festival season has already ended.