Gold edges higher on overseas market

Gold edges higher on overseas market

Mumbai: Gold edged higher on Wednesday afternoon, recovering partially from its lowest level in three weeks, following a similar trend in overseas market, although a firm rupee kept a lid on gains.

Dealers said physical buying retreated after traders booked deals at sub-$1,500 levels struck in the previous session. Premiums charged on London prices were steady at $1.5 an ounce.

“Demand is not at the same level as yesterday... We have done about 7-8 deals from morning. There was good response at levels below $1,500 (an ounce) yesterday," said a dealer with a state-run, bullion-importing bank.

The most-active gold for August delivery on the Multi Commodity Exchange (MCX) was trading 0.27% higher at Rs22,163 per 10 grams, moving away from a three-week low seen in the previous session, a level last seen on 2 June.

Overseas gold was higher on optimism that Greece’s parliament will approve an austerity plan later in the day, underpinning positive sentiment for bullion and other commodities.

The rupee rose more in afternoon trade on Wednesday as shares surged alongside gains in the euro, but underlying mood stayed cautious before outcome of Greece’s vote on austerity package.

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