Gold buying retreats as rupee weakens

Gold buying retreats as rupee weakens

Mumbai: Gold buying retreated on Tuesday afternoon as the rupee weakened, making the dollar-quoted precious metal expensive, after a brief pick up in offtake in the previous session, dealers said.

“Yesterday, I placed indents for about 122 kgs, but there is nothing today," said a dealer with a state-run, bullion-importing bank in Mumbai.

Gold contract on the Multi Commodity Exchange (MCX) was trading 0.01% lower at 20,383 per 10 grams at 12:53pm, tracking overseas markets, but a weaker rupee kept the downside limited.

“I have covered only for 10 kg from morning, stocks aren’t moving today," said another dealer with a state-run bullion dealing bank.

The Indian rupee came off its fresh 10-week lows on Tuesday afternoon, but was still weak, following a stronger-than-expected rise in July-September GDP but losses in shares continued to weigh.

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

India is still in the midst of the wedding season, when demand for gold tends to go up, after strong Dhanteras and Diwali festivals earlier in the month.

In the quarter to September, India imported 214 tonnes of gold, up 21.6% on year, the World Gold Council said.