Gold buying remains weak for third day

Gold buying remains weak for third day

Mumbai: India gold buying remained weak for the third consecutive day on Friday as prices overseas hit a new record, despite the rupee’s rise, which makes the dollar-quoted asset cheaper, analysts said.

“There are no domestic buyers, some exporters have been covering, there are plenty of orders downwards at $1,280-$1,285 (an ounce)," said a dealer with a state-run bullion dealing bank.

International spot gold rose to a record high of $1,298.25 per ounce, propelled by continued concerns about global economic health.

However, the rupee’s strength curbed the rise in local gold.

The Indian rupee extended gains tracking a rise in local shares which raised hopes of more foreign fund inflows, while an increase in the foreign investment limit in local debt also supported sentiment.

Dealers said underlying demand for the yellow metal remained strong on the back of pent-up demand and above normal monsoon boosts confidence among consumers to spend.

India’s second-biggest gold importer MMTC Ltd expects to increase imports as the festival season and higher incomes boost consumer spending, Director Ved Prakash had said.

Festival season is on in India, the world’s biggest buyer of bullion. The auspicious day of Dhanteras, when the country’s jewellery shops witness the highest gold sales every year, falls in November.