Gold recovers from 1-week low; buying retreats

Gold recovers from 1-week low; buying retreats

Mumbai: Gold futures recovered partially on Thursday afternoon from its lowest level in more than a week following a similar trend overseas and aided by a weaker rupee, dealers said.

The most-active gold for October delivery on the Multi Commodity Exchange (MCX) was 1.5% higher at 27,591 per 10 grams at 1:10pm, recovering from the previous session’s low of 26,853, a level last seen on 30 August.

Overseas gold prices bounced back more than 1 percent on Thursday, boosted by bargain-hunters after the previous session’s fall of 3 percent, ahead of a speech by US President Barack Obama that could allay recession fears.

Obama will lay out a jobs package worth more than $300 billion later on Thursday, after data showed the world’s top economy added no new jobs in August.

The rupee fell to a near one-year low dragged by dollar demand from domestic oil companies and weak Asian currencies, with choppy equities also weighing.

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

Gold buyers in India, the world’s biggest buyer of bullion, retreated as prices edged higher from its one week trough.

“Activity was there yesterday but not in a big way, there is nothing today so far. Even the rupee trend is worrying," said Pinakin Vyas, assistant vice-president with IndusInd Bank.

India’s wedding and festival demand is expected to gain pace and peak in October and November before tapering off in December.