Gold buying recoils as prices peak

Gold buying recoils as prices peak

Mumbai: Gold buying recoiled on Tuesday afternoon as prices hit a new peak, as traders eyed the movement of the rupee for direction, traders said.

“There are no deals today, as prices are at a psychologically new levels of over $1,400 (an ounce)," said a dealer with a state-run bullion importing bank.

International gold rose to a record high of $1,414.60 for the fourth straight session, as inflation worries and euro zone sovereign debt woes continue to lure investors to precious metals.

The Indian rupee was held in a tight band on Tuesday as mild losses in local shares and the dollar’s gains versus majors were offset by some foreign fund inflows towards the Power Grid Corporation follow-on public sale.

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

India, the world’s largest consumer of bullion, celebrated its biggest gold-buying festival, Dhanteras, and Diwali last week, and traders said buying would continue on account of weddings.

The sales figures for the festival week haven’t been computed yet, but the World Gold Council expects gold sales in the week to 6 November to rise by upto 40% from 56 tonne in the year-ago period.