Gold extends gains to near peak; buying absent

Gold extends gains to near peak; buying absent

Mumbai: Gold extended gains on Wednesday afternoon to near its peak following firm overseas markets, and a weaker rupee, which made the dollar-quoted yellow metal expensive, analysts said.

The most-active gold for October delivery on the Multi Commodity Exchange (MCX) was trading 0.64% higher at 26,392 per 10 grams at 1: 47pm, after nearing its previous record at 26,400.

The contract had struck its peak at 26,457 rupees last week.

Global gold held steady near a record high after a Franco-German summit failed to convince investors that the euro zone debt crisis would be solved effectively, supporting safe-haven demand for bullion.

The rupee, which was weaker on euro’s retreat and oil demand, plays an important role in determining the landed cost of the dollar-quoted yellow metal.

Physical buying stayed weak as prices neared peak.

“Buying is not very encouraging. Indian buyers are still at sidelines," said a dealer with a private bank in Mumbai, which imports bullion.

Gold demand from India, the world’s biggest buyer of the yellow metal, will gain pace in coming weeks on the back of wedding and festival demand.