Gold traders step up festival buys as prices fall

Gold traders step up festival buys as prices fall

Mumbai: Gold traders in India, the world’s biggest consumer of bullion, stepped up last minute purchases to stock for next week’s festivals as prices fell for the fourth session in a row to their lowest level in more than six weeks.

“Buying has started and come out in huge quantities," said Haresh Acharya, head of bullion desk, Parker Bullion in Ahmedabad.

On 24 October, India will celebrate Dhanteras, a day considered auspicious to buy gold, followed by Diwali a few days later. The marriage season continues till December.

“Market is very volatile and rupee is down sharply. There are good buy orders close to $1,600 (an ounce)," said a dealer with a state-run bullion importing bank in Mumbai.

The most-active gold for December delivery on the Multi Commodity Exchange (MCX) was 0.92 percent lower at 26,215 per 10 grams, after falling to 26,103, a level last seen on 7 September.

Gold fell 2% to $1,608.40 an ounce on Thursday as worries about Europe’s escalating debt crisis spooked investors.

A weaker rupee kept the downside in prices limited. The rupee plays an important role in determining the landed cost of the yellow metal, which is quoted in dollars.

The rupee dipped to a more than three-week low, tracking weak local shares and the euro, with persistent dollar demand from domestic oil companies and gold importers also dragging, dealers said.