Gold retreats 1.6% from record high; demand weak

Gold retreats 1.6% from record high; demand weak

Mumbai: Benchmark gold futures corrected by more than 1% on Tuesday afternoon, retreating from a record high in opening trades, but demand in physical market remained muted as buyers waited for prices to stabilise, dealers said.

At 3:25 pm, the October contract on the Multi Commodity Exchange was down 0.74 percent to 28,275 per 10 grams, after a record high of 28,744 earlier in the day.

“There is too much volatility in the market. Buyers are waiting for prices to stabilise before entering into the market," said a dealer with a private bullion-importing bank in Mumbai.

Indian market corrected in tandem with the overseas market and as the Indian rupee pared some losses. The rupee plays an important role in determining the landed cost of the yellow metal, which is quoted in dollars.

International spot gold fell by more than 2% on Tuesday, having earlier risen to a record high at $1,920.30 an ounce, after the Swiss National Bank surprised markets with its decision to peg the franc to the euro to tame the currency’s runaway rally this year.