Gold buying retreats as prices inch higher

Gold buying retreats as prices inch higher

Mumbai: Gold buying retreated on Monday afternoon as prices inched higher, following a weaker rupee and a firm overseas market, dealers said.

“I placed deals for only 10 kgs, we placed indents for about 100 kgs on Friday evening at $1,373 (an ounce)," said a dealer with a state-run bullion dealing bank in Mumbai, referring to orders from overseas.

Gold contract on India’s Multi Commodity Exchange (MCX) was trading 0.59% higher at 20,611 per 10 grams at 1:28pm, tracking firm overseas markets and a weaker rupee.

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

The Indian rupee weakened tracking the euro’s losses versus the dollar while a choppy local stock market failed to provide any clear cues on the direction of foreign fund flows.

The wedding season that follows Dhanteras and Diwali festivals is underway in India and will continue till end-December, sustaining the demand for the yellow metal.

The country accounts for 20% of global demand for gold jewellery.

In July-September, India imported 214 tonnes of gold, up 21.6 percent on year, the World Gold Council said.