Gold up over 1%, recovering from 2-week low

Gold up over 1%, recovering from 2-week low

Mumbai: Gold rose more than a percent on Friday, recovering from previous session’s 2-week low, following firm overseas markets and supported by a weaker rupee back home, dealers said.

At 1:56pm, the most-active gold for December delivery on the Multi Commodity Exchange (MCX) was 0.82% higher at 26,564 per 10 grams, recovering from previous session’s low of 26,103, a level last seen on 7 October.

Global gold prices gained half a percent on Friday, following a rebound in other commodities, but uncertainty about the euro zone’s resolution of its debt crisis is likely to cap gains.

The rupee dived to a 30-month low on Friday dragged by strong dollar demand from importers and caution rippling across equities and the euro on nervousness around euro zone crisis.

The rupee plays an important role in determining the landed cost of the yellow metal, which is quoted in dollars.

Physical buying continued as traders stocked for festivals due next week, despite the weaker rupee.

“There is good buying, though rupee made some nasty moves," said a dealer with a private bullion importing bank in Mumbai, adding “demand will remain robust, I have no reason to believe why gold demand not to be remain strong."

India, the world’s biggest consumer of the yellow metal, will celebrate Dhanteras on Monday, followed by Diwali on Wednesday, when demand for bullion goes up.