Gold adds to gains; traders continue stocking up

Gold adds to gains; traders continue stocking up

Mumbai: India gold rose on Friday, extending gains for a third session, following a similar trend overseas, although a stronger rupee limited the upside in prices at home, dealers said.

The most-active gold for December delivery on the Multi Commodity Exchange (MCX) was 0.57% higher at 26,662 per 10 grams, after gaining 2.3% in the previous two sessions.

Global gold headed for its biggest weekly gain in a month as equities regained strength after fresh European efforts to resolve the debt crisis eased worries about a global recession, while purchases from jewellers offered additional support.

The rupee rose as shares rebounded strongly following fresh efforts by euro zone policymakers to prevent precipitation of Europe’s debt problems into a financial crisis.

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

Physical buying continued as traders sought to stock for the upcoming festivals later in October.

“There is demand for the last 7-8 days traders have started re-stocking. It was a welcome correction when market came down to $1,650 (an ounce)," said a dealer with a private bullion-importing bank in Mumbai.

“Festival demand will remain very strong as people are convinced that prices will not further go down from here, while the sky is the limit for upside," said the dealer.