Gold importers pick up bargains as rupee firms
MUMBAI (Reuters) - Gold importers in India continued picking up deals on Thursday to re-stock for weddings and festivals, as appreciating rupee kept the prices at their lowest level in more than five months.
Wedding and festivals season has started in India, the world's biggest buyer of the metal, but the federal government plans to restrict gold consumption by announcing more measures in addition to a 50 percent hike in import duty to keep a lid on bloating current account deficit.
The actively traded gold contract for February delivery on the Multi Commodity Exchange (MCX) was 0.27 percent lower at 30,137 rupees per 10 grams, after hitting a low of 30,086 rupees, a level last seen in mid-August.
"Demand is still there as rupee is giving a good support to local prices, and we have this level after a long time. Activity may continue if rupee appreciates further," said a dealer with a private bullion importing bank in Mumbai.
The rupee, which strengthened on Thursday, plays an important role in determining the landed cost of the dollar-quoted yellow metal.
In the overseas market, gold eased as a retreat in European stocks and the euro prompted investors to cash in gains made the day before after the Federal Reserve reaffirmed its bond-buying programme and data showed a surprise dip in U.S. growth.
Silver for March delivery was 0.42 percent lower at 58,814 rupees per kg.
The following were the prices of gold and silver in rupees at 16.52 p.m. local time in the spot market, quoted by HDFC Bank:
(Reporting by Siddesh Mayenkar; Editing by G.Ram Mohan)
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As well as making the lives of millions of middle class Indians easier, the sharp drop in Brent crude prices since June is a boon for Prime Minister Narendra Modi in his fight to revive an economy growing at its slowest rate since the 1980s. Full Article