Gold buying slows as discounted Feb contract nears expiry

MUMBAI Fri Feb 1, 2013 4:00pm IST

A goldsmith holds finished gold bangles at a workshop in Kolkata January 16, 2013. REUTERS/Rupak De Chowdhuri/Files

A goldsmith holds finished gold bangles at a workshop in Kolkata January 16, 2013.

Credit: Reuters/Rupak De Chowdhuri/Files

Related Topics

MUMBAI (Reuters) - Gold importers in India slowed purchases ahead of weddings and festivals as the February futures contract, which neared expiry, was quoted at a discount to prices of the yellow metal at banks, the primary importers of bullion.

The weddings and festivals season has started in India, the world's biggest buyer of the metal, but the federal government plans to restrict gold buying by announcing more measures in addition to a 50 percent hike in import duty to keep a lid on its bloating current account deficit.

"The market is slow. Everyone is keeping their investments on hold and looking at a discount in Ahmedabad delivery contracts. Most of the traders are waiting for expiry of the futures contract," said Ketan Shroff, director of PentaGold in Mumbai. MCX contracts are delivered in Ahmedabad due to lower local taxes in Gujarat.

Gold for February delivery on the Multi Commodity Exchange (MCX) was 0.18 percent higher at 29,924 rupees per 10 grams due to a weaker rupee, recovering from a low of 29,794 rupees in the previous session, a level last seen in August last year.

The rupee, which weakened on Friday, plays an important role in determining the landed cost of the dollar-quoted yellow metal.

The MCX February contract deliverable at Ahmedabad was available at a discount of 15,000 rupees per kilogram to the bank price. The contract will expire on February 5.

In the overseas market, gold ticked lower on Friday after recent gains prompted investors to take profits, but the metal was heading for a small weekly rise before the release of key U.S. employment data that may show a modest growth.

Silver for March delivery on the NCDEX was flat at 57,844 rupees per kg.

(Reporting by Siddesh Mayenkar; Editing by Prateek Chatterjee)

FILED UNDER:

Telecom

Reuters Showcase

Insurance Bill

Insurance Bill

Opposition support bolsters prospects for insurance reforms  Full Article 

SBI Share Sale

SBI Share Sale

SBI's up to $2.4 billion share sale likely by end April - sources   Full Article 

Eicher Share Sale

Eicher Share Sale

Truck maker Volvo sells shares in Eicher Motors  Full Article 

Beef Ban

Beef Ban

After beef ban, Hindu groups force abattoirs to close   Full Article 

Monsoon Season

Monsoon Season

Exclusive - India expects better monsoon rains this year  Full Article 

Services Growth

Services Growth

Services growth at eight-month high in Feb - HSBC PMI  Full Article 

'India's Daughter'

'India's Daughter'

Documentary on 2012 Delhi gang rape banned in India  Full Article 

Capex Slashed

Capex Slashed

Cairn India slashes 2015-16 capex on falling crude   Full Article 

Reuters India Mobile

Reuters India Mobile

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