Gold buying recovers; premiums may edge up

Gold buying recovers; premiums may edge up

Mumbai: Gold prices eased a tad on Friday afternoon following weakness in overseas market, triggering a slight pick-up in offtake for harvest festivals and wedding season slated later, though supply issues remained, which could push premiums even higher, dealers said.

“The $10-an ounce-fall has helped demand, I placed deals for 80-85 kgs at $1,375-1,377," said a dealer with a state-run, bullion-dealing bank in Mumbai.

The most-active gold for February delivery on the Multi Commodity Exchange (MCX) was trading 0.40 percent lower at 20,357 per 10 grams at 12:59pm, after hitting a low of 20,353.

A weaker rupee kept the downside in prices limited. The Indian rupee fell tracking losses in local shares, which raised worries of foreign investors continuing to pull out funds from Asia’s third-largest economy, and weighed by mild gains in the dollar overseas.

Comex gold was trading 0.79% lower at $1,376 an ounce.

Bank dealers said premiums may rise to $1.65-1.75 an ounce from the current $1.40/1.45.

“Supply is still a problem, and it looks unlikely to be solved until February. If this demand trend continues, we might see further rise in premiums," said the state-run bank dealer.