Gold extends losses; physical buying remains slack

Gold extends losses; physical buying remains slack

Singapore: Gold futures extended losses for another session on Thursday afternoon following a similar trend in overseas market, although a weaker rupee kept the downside limited, analysts said.

The most-active gold for October delivery on the Multi Commodity Exchange (MCX) was 1.10% lower at 27,845 per 10 grams at 3:44pm.

Global gold slipped 1% in volatile trade on Thursday after equities rose on optimism over tentative steps by European policy makers to resolve and limit the region’s debt crisis.

The rupee fell for the ninth session on Thursday, a day after touching a near two-year low, as oil refiners stepped up dollar purchases and as concerns over a possible Greek debt default resurfaced to drag Asian peers lower.

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

Physical buying remained slack as the rupee weakened, making the yellow metal expensive for local traders.

“There has been not much demand since 2-3 days as rupee has weakened. The festival demand is also not in full swing," said a dealer with a state-run bullion importing bank in Mumbai.

India is the biggest consumer of bullion followed by China. Wedding and festival demand is expected to gain pace and peak in October and November before tapering off in December.