Gold trades steady; physical demand slack

Gold trades steady; physical demand slack

Mumbai: Gold steadied near its lowest level in more than a week, following flat overseas markets, with a stronger rupee expected to weigh on sentiment later in the session, dealers said.

The most-active gold for August delivery on the Multi Commodity Exchange (MCX) was trading 0.02 percent higher at 22,898 per 10 grams at 2:33pm, after hitting a low of 2,831, a level last seen on 13 July.

Overseas gold held steady below $1,600, after the euro zone leaders reached an agreement on a Greece bailout plan, but prices are expected to be range-bound as investors keep an eye on the progress made in US debt talks.

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

Physical buying slackened as traders were unwilling to stock high-priced gold.

“It is too expensive to stock and seasonal slackness is also affecting buying," said a dealer with a private bank in Mumbai.

India, the world’s biggest buyer of bullion, is in the middle of the sowing season, when farmers, the traditional buyers of the yellow metal, divert their savings to agricultural equipment and fertilizers.