Gold falls more, weak rupee caps downside

Gold falls more, weak rupee caps downside

Mumbai:Gold futures extended losses on Tuesday afternoon in tandem with foreign markets, although a weaker rupee kept the downside limited.

The most-active gold for December delivery on the Multi Commodity Exchange was 0.53% lower at 26,682 per 10 grams.

Global gold prices eased slightly, retreating with risk assets after China’s economic growth eased to its slowest in more than two years and Germany cautioned against expectations of a quick cure to euro zone’s debt crisis.

International gold was down at $1,659.59/1,661.00 an ounce, down from the previous close of $1,670.90/1,671.65.

The rupee weakened dragged by weak domestic equities, a lacklustre euro and some dollar demand from domestic oil companies.

Physical traders continued to book deals, though in low quantities, ahead of a slew of festivals later in the month.

“There are some deals at below $1,660 (an ounce)," said a dealer with state-run bullion importing bank in Mumbai.

“Demand is good for the upcoming festival season and market needs a heavy correction before going high," said Chanda Venkatesh, managing director with CapsGold, a bullion merchant in Hyderabad.

Gold demand in India, the world’s largest bullion buyer, will be strong in October-December, a traditional time for festivals and weddings, despite high inflation that eats into savings and multiple growth-choking central bank rates hikes.