Gold prices near one-month low ahead of festivals

SINGAPORE Fri Nov 2, 2012 5:05pm IST

1 of 2. A salesman arranges a gold necklace inside a gold jewellery showroom in Kochi April 16, 2012.

Credit: Reuters/Sivaram V/Files

Related Topics

A statue of Ganesh, the deity of prosperity, is carried in a taxi to a place of worship on the first day of the ten-day-long Ganesh Chaturthi festival in Mumbai August 29, 2014. REUTERS/Danish Siddiqui

Ganesh Chaturthi Festival

During Ganesh Chaturthi idols will be taken through the streets in a procession accompanied by dancing and singing, and will be immersed in a river or the sea in accordance with Hindu faith.  Slideshow 

SINGAPORE (Reuters) - Gold importers in India rushed to stock up materials ahead of key festivals after prices of the precious metal dropped to the lowest level in nearly a month, while buying in the rest of Asia was sluggish.

India's benchmark gold on the Multi Commodity Exchange fell as low as 30,812 rupees per 10 grams, thanks to the rupee hitting a two-week high against the dollar, traders said.

India, the world's top gold consumer, is approaching the height of its festival season, which peaks with the Diwali and Dhanteras festivals later this month. Gold is a key part of gifts and is used for dowries at weddings, which are popular at this time of year.

"We are hoping for good Diwali sales," said Lokesh Kumar Agarwal, chairman of Brijwasi Bullion and Jewellers in Lucknow.

But traders said Indian buying is very price sensitive and could easily dry up if prices rebound.

Spot gold traded around $1,710 an ounce on Friday, off its October high near $1,800, as the excitement after the U.S. Federal Reserve's latest round of quantitative easing faded.

Graphic: Gold prices in different currencies link.reuters.com/kuk73t

In Singapore and Hong Kong, dealers reported light buying as range-bound prices failed to excite either buyers or sellers.

"We see some light buying when prices approach $1,700, but overall demand is sluggish as people are still worried about the global economy," said Ronald Leung, a physical dealer at Lee Cheong Gold Dealers in Hong Kong.

Premiums on gold bars in Hong Kong were cited in the range of 50 cents to $1 an ounce above London prices. In Singapore, premiums stood at 80 cents, dealers said.

WEEK AHEAD

India's gold demand will remain in focus as the country's festival season peaks in mid-November.

Market participants are also anxiously awaiting the U.S. presidential election and its impact on monetary policy, which has been a key driver of gold prices this year. (Additional reporting by Siddesh Mayenkar in MUMBAI; Editing by Joseph Radford)

FILED UNDER:
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

  • Most Popular
  • Most Shared

Market Eye

REUTERS SHOWCASE

Coal Block Allocation

Coal Block Allocation

Government urges Supreme Court to not cancel some 'illegal' coal mines  Full Article 

Modi in Japan

Modi in Japan

Japan and India agree to boost strategic ties at summit  Full Article 

HSBC PMI

HSBC PMI

Factory activity expands at slower clip in August.  Full Article 

Market Outlook

Market Outlook

Indian shares headed for correction, but outlook strong - BofA Merrill.  Full Article 

India Infrastructure

India Infrastructure

RBI rule handicaps India's infrastructure hopes  Full Article 

Book Talk

Book Talk

Reema Abbasi and a glimpse of Pakistan’s Hindu past  Full Article 

China Economy

China Economy

Retreat in China's PMIs heightens calls for policy easing.  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device.  Full Coverage