Gold rises more than 1.5%; physical buying up

Gold rises more than 1.5%; physical buying up

Mumbai: Gold extended gains, picking up from a 2-week low, helped by firm overseas markets and a weak rupee at home that made the dollar-quoted yellow metal expensive, dealers said on Friday.

The most-active gold for October delivery on the Multi Commodity Exchange (MCX) was 1.30% higher at 26,718 per 10 grams at 1:52pm, recovering from its 2-week low of 25,512 hit on Wednesday, a level last seen on 12 August.

Overseas gold prices rose 1%, recovering some of this week’s hefty losses ahead of a key speech from Federal Reserve chair Ben Bernanke later in Jackson Hole, which will be closely watched for signs as to future US monetary policy.

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

Demand edged up as traders re-stocked to meet festival and wedding demand.

“There is demand as traders are expecting that prices will still go up," said a dealer with a state-run bullion importing bank.

Festival season in India, the world’s largest consumer of yellow metal, has started and will peak with October before tapering off in December.