Gold hits 2-month low; unleashes bargin buying

Gold hits 2-month low; unleashes bargin buying

Mumbai: Gold extended losses for a second day on Friday, and struck its lowest level in two months, spurring purchases from traders ahead of weddings next month, though a weaker rupee kept the downside limited, dealers said.

“I may have booked for 200 kgs of gold from yesterday at $1,346-1,349 (an ounce). They all want to take maximum advantage of falling prices," said a dealer with a state-run bullion dealing bank in Mumbai.

“There could be more demand if the rupee appreciates," said the dealer.

At 2:31pm, the most-active February was trading 0.39% lower at 20,097 per 10 grams, after falling to a low of 20,067, a level last seen on 22 November.

The rupee, which struck its lowest level in seven weeks, is vital in determining the landed cost of the dollar-quoted yellow metal.

“Since yesterday evening, the market is very busy," said Pinakin Vyas, assistant vice-president with IndusInd Bank.

The winter harvesting season is underway in India and is expected to leave more disposable income with rural households, which contribute significantly to gold demand.

The wedding season starts in February.

Premiums also edged higher primarily driven by limited supply amid firm demand, traders said.

“Premiums are still on the higher side at $1.50/1.70, up 10-20 cents," said IndusInd’s Vyas.

In India, which accounts for 20% of global demand for jewellery, gold is widely gifted in religious celebrations and weddings.