Gold buying slack; weak rupee weighs

Gold buying slack; weak rupee weighs

Mumbai: India’s gold buying continued to be slack on Wednesday afternoon as prices traded near the most-watched Rs19,000 mark, with a weaker rupee also weighing on sentiment, dealers said.

“It’s all dull at the moment because of high prices and monsoon. There was buying in bits and pieces yesterday, when gold was below $1,230 (an ounce)," said a dealer with a state-run bullion dealing bank.

The August gold contract on the Multi Commodity Exchange (MCX) was trading 0.07% higher at Rs18,870 per 10 grams, after hitting a high of Rs18,880, not far from the psychological level of Rs19,000.

The rupee dropped to its lowest level in two weeks, weighed by early losses in local shares and weak regional peers. Traders said the dollar’s moves versus majors would be watched for cues.

A weak rupee makes the dollar-denominated asset expensive.

India is entering the lean season for gold deals as the annual monsoon rains sweep the country, and farmers, who account for 65% of the country’s gold demand, spend their money on sowing crop.

“We can see more buying if prices fall in the range of $1,230-1,235 (an ounce)," said another dealer with a private bank.