Gold eases from record; traders await more falls

Gold eases from record; traders await more falls

Mumbai: India gold buying remained muted on Wednesday even as prices eased marginally from their record highs, but traders awaited further falls in a seasonally lean period, dealers said.

A weaker rupee, which made the dollar-quoted asset expensive, also weighed on sentiment, they added.

“Nothing much... buying is absolutely dull at the moment, even the rupee is not acting in support," said a dealer with a private bullion dealing bank in Mumbai.

The most-active August gold was trading 0.28% lower at Rs18,938 per 10 grams at 2:19pm, falling from a high of Rs18,999. Prices were still below the all-time high of Rs19,198 struck on Tuesday.

Rural India, which accounts for 65 percent of the total demand, divert their savings to buy seeds and fertlizers for their kharif crops, leading to limited demand for the metal during the sowing season.

India has also been witnessing slackness in gold buying since the start of May as record high prices dented demand.

May imports fell to around 17-18 tonnes from 28.6 tonnes in the same month a year ago, the head of Bombay Bullion Association (BBA) Suresh Hundia, told Reuters on 28 May.

However, near-record prices haven’t enticed scrap-sellers, who may be standing by for higher prices, traders said.

“Sellers are not there despite of prices reaching Rs19,000.. good scrap flow was seen last when prices were at Rs18,000," said Jitendra Kantilal, partner with Jugraj Kantilal and co, a scrap dealer in Mumbai.