Gold buying dips as weak rupee pushes up price

Gold buying dips as weak rupee pushes up price

Mumbai: Gold traders stayed away on Friday afternoon, as a weaker rupee made the dollar-quoted yellow metal expensive, dealers said.

“I have done minimal deals from morning as even the rupee is not in supporting mode," said a dealer with a state-run bank in Mumbai, which imports bullion.

The most-active gold contract edged higher by 0.20% higher at 20,406 per 10 grams at 2:00pm, helped by a weak rupee. The contract had struck an intra-day high of 20,412 earlier in the session.

“If gold breaches below 20,000, we may see some buying interest," said another dealer with a private bullion importing bank.

The Indian rupee extended its fall to 10-week lows tracking a more than 1% drop in domestic shares while bunched up dollar demand a day after the US Thanksgiving holiday, also weighed.

India’s gold market is still in the midst of its busy season after the Dhanteras and Diwali festivals earlier this month as many weddings are to take place till December, when demand for the yellow metal tends to go up.