Gold traders extend buys into 2nd week on firmer rupee

Gold traders extend buys into 2nd week on firmer rupee

Mumbai: India gold traders extended buying into a second week on Monday as the rupee, which hit its highest level in 4-1/2 months, weighed on the domestic yellow metal on the day overseas gold struck a new record high of $1,300 an ounce level, dealers said.

“They are buying today as well due to a strong rupee," said a dealer with a state-run bank in Mumbai, which deals in bullion.

Gold on the Multi Commodity Exchange (MCX) was trading 0.28% lower at Rs19,082 per 10 grams, about a percent lower than the all-time high of Rs19,257 struck on 15 September.

The rupee strengthened past 45 per dollar, its highest level in four-and-half months, boosted by sustained foreign fund buying of local shares and aided by broad losses in the dollar.

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

However, international gold struck a record high of $1,300 an ounce as worries about the health of global economy spurred safe haven buying.

India is in the middle of the festival season, with Dussera in October and Dhanteras in November, when jewellers register highest sales every year.