Gold buying retreats as prices hit near 2-week high

Gold buying retreats as prices hit near 2-week high

Mumbai: Gold buying retreated on Monday afternoon as prices extended gains for a fourth session to hit the highest level in nearly two weeks, with traders eyeing the rupee’s movement for direction, dealers said.

“I haven’t done anything for the local market; we covered for about 15 kg for exporters," said a dealer with a state-run bullion importing bank in Mumbai.

At 1:46 p.m., the most-active gold contract was trading 0.18% higher at 19,843 per 10 grams, after hitting a high of 19,871, a level last seen on 19 October.

The contract had gained 1.9% in the previous three sessions.

The Indian rupee see-sawed as domestic share gains and the dollar’s losses versus majors were offset by dollar demand from foreign banks for Coal India’s share sale-related refunds.

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

Festival demand will peak with Dhanteras on Wednesday and Diwali on Friday.

Gold sales during 31 Oct-6 Nov, when the country celebrates Dhanteras and Diwali festivals, may rise by up to 40% on year, in turn supporting the outlook for record imports in 2010, a senior World Gold Council (WGC) official said on Thursday.

Following were the prices being quoted by HDFC Bank in rupees in the spot market at 1:46 p.m.