Gold buying retreats; rupee watched

Gold buying retreats; rupee watched

Mumbai: India gold buying retreated on Friday afternoon as prices extended their rise for a second session, with traders eyeing the movement in the rupee for direction, dealers said.

“They are unwilling to come after the price jump. They would now prefer to be on wait-and-watch mode," said a dealer with a state-run bullion importing bank in Mumbai.

Gold on the Multi Commodity Exchange (MCX) was trading 0.50% higher at Rs20,079 per 10 grams at 3:44pm, after hitting a high of Rs20,103. But prices were still down from the record high of 20,569 rupees struck in early Novemeber.

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

Traders expect gold buying in India, which gained momentum despite higher prices during Dhanteras and Diwali festivals, to continue on account of the wedding season which is on until December.

In the quarter to September, India, the world’s largest consumer of bullion, imported 214 tonne, up 21.6% from the same period last year, the World Gold Council said.