Gold extends losses; jewellers seek bigger falls

Gold extends losses; jewellers seek bigger falls

Mumbai: Gold in India extended losses on Monday afternoon, following similar trend overseas, although a weaker rupee kept the downside limited, dealers said.

At 2:09 pm, the most-active gold for October delivery on the Multi Commodity Exchange (MCX) was 0.49% lower at Rs28,014 per 10 grams.

Global gold fell more than 1% on Monday but bargain hunters could cushion the fall, while escalating worries about Europe’s debt crisis sent bullion priced in the euro to a record high.

Fears about a Greek default rose after senior politicians in German chancellor Angela Merkel’s centre-right coalition started talking openly about it following the surprise departure of German’s top official at the European Central Bank last week.

The rupee weakened to its lowest in more than a year after government data showed industrial output in July rose a lower-than-expected 3.3% from a year earlier.

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

Physical players were on the sidelines awaiting bigger price falls to stock up ahead of a series of festivals in September and October.

“Buying is not much as rupee gone down sharply, hitting bullion dealer’s costs," said a dealer with a private-run bullion importing bank.

India is the biggest consumer of bullion followed by China. Wedding and festival demand is expected to gain pace and peak in October and November before tapering off in December.