Gold buying recoils as prices rebound from low

Gold buying recoils as prices rebound from low

Mumbai: India gold buying retreated from on Monday afternoon from a pick-up in purchases seen last week, as prices extended gains to recover from a three-week low, though a strong rupee kept the upside limited, dealers said.

"There isn’t much buying compared to last week, when I indented for a tonne," said a dealer with a state-run bullion dealing bank in Mumbai.

The most-active December gold contract was trading 0.67% higher at Rs19,587 per 10 grams at 1:39pm, recovering from a three-week low of Rs19,260 hit on Friday.

“I have people who are enquiring at Rs19,100," said another dealer from a private bullion-importing bank.

The rupee pulled back from its biggest one-day loss in a month-and-half in the previous session, as broad dollar selling resumed globally, while gains in local shares also aided sentiment.

India, the world’s biggest consumer of yellow metal, is in the middle of the festival season, with Dhanteras in November, when jewellers register highest sales in the year. Weddings also take place in the festival season.

State-run Indian trader MMTC Ltd expects to import more than 200 tonnes of gold in the current fiscal year to March 2011 on good demand seen in the current festival season despite high prices, its chairman said.