Gold buying retreats; strong rupee caps price rise

Gold buying retreats; strong rupee caps price rise

Mumbai: Gold buyers retreated on Monday after a short rise in prices in early trade, awaiting further cues, dealers said.

“It’s a dull start to the week, as traders think that prices may fall," said a dealer with a state-run bullion importing bank in Mumbai.

The most-active December gold contract on the Multi Commodity Exchange (MCX) was trading 0.14% higher at Rs20,131 per 10 grams, still down more than 2% from the all-time high of Rs20,569 struck in early November.

“There are orders below Rs20,000, they all want to buy for weddings," said another dealer with a private bank in Mumbai.

A strong rupee kept the upside in prices limited. The rupee plays an important role in determining the landed cost of the yellow metal, which is quoted in dollars.

India is currently undergoing the wedding season, which contributes to about 70% of the total demand, the World Gold Council say.

In the quarter to September, India, the world’s largest consumer of bullion, imported 214 tonnes, up 21.6% from the same period last year, the WGC said.