Gold recovers from 1-week low as rupee weakens

Gold recovers from 1-week low as rupee weakens

Mumbai: Gold recovered from the lowest level in more than a week helped by a weaker rupee, which made the yellow metal quoted in dollars expensive, keeping physical traders away, dealers said.

Prices are still below the all-time high of Rs29,212 struck earlier in the week.

The rupee, which plays an important role in determining the landed cost of the yellow metal, skidded beyond 51 against the dollar to its lowest in 32 months.

Physical traders, who sought to stock for the ongoing wedding season, stayed on the sidelines fearing more volatile price swings going ahead and premiums charged on stocks on London prices remained steady at $1.5 an ounce.

“Sales are not there as the rupee has depreciated considerably and due to huge volatility," said a dealer with a state-run bullion importing bank in Mumbai.

Wedding season will last till December in India, the world’s biggest buyer of bullion.

India gold demand, which recorded a fall of 20% in the September quarter, could rise in the last quarter and surpass the 1,000 tonnes demand mark in 2011, according to the World Gold Council figures.