Indian gold futures drop from record high

Indian gold futures drop from record high

Mumbai: India gold futures eased on Wednesday after hitting a record high late on Tuesday, as a stronger rupee made dollar-denominated gold cheaper in local currency but demand was sluggish despite big festivals this week.

Gold futures on the Multi Commodity Exchange of India Ltd (MCX), opened down 0.2% at Rs16,010 ($347) per 10 grams around 0430 GMT.

On Tuesday, the contract had closed up 0.7% at Rs16,036 after scaling a record Rs16,048 during late trade. The previous all-time high was Rs16,040 on 20 February.

Traders said the high prices dented demand just as India celebrates the Dhanteras festival on Thursday, which is the single biggest day for gold purchases in the tradition-bound country.

“People are not buying," said a dealer in a large bank in Mumbai.

The high price will also curb buying for the Diwali festival on Saturday when Hindus worship the goddess of wealth Lakshmi, offering her newly purchased gold items.

India is the world’s biggest market for gold, but demand has remained down through most of the year as prices struck record highs and an economic slowdown dampened sentiment.

Gold imports during January to September fell 59% to around 130 tonnes from 315 tonnes in the same period last year, data from the Bombay Bullion Association showed.