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

  • Most Popular
  • Most Shared

Pharma

REUTERS SHOWCASE

Modi's U.S. Trip

Modi's U.S. Trip

PM Modi to get rock star reception in New York.  Full Article 

Northeast Floods

Northeast Floods

Landslides and floods kill 22 in northeast India.  Full Article 

Food Subsidy

Food Subsidy

Ram Vilas Paswan says no plans to raise food handouts.  Full Article 

New Plants

New Plants

Canadian auto parts maker Magna to open two new plants in Gujarat.  Full Article 

Importing Iron Ore

Importing Iron Ore

JSW Steel to import 10 mln T of iron ore due to local shortage.  Full Article 

Breaking Up

Breaking Up

Philips to split off lighting business, form separate company.  Full Article 

End of Monsoon

End of Monsoon

Monsoon starts withdrawing from northwest region.  Full Article 

Border Row

Border Row

Chinese and Indian troops in Himalayan standoff.  Full Article 

Reuters India Mobile

Reuters India Mobile

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