December 31, 2012 / 10:18 AM / 5 years ago

Gold demand drops ahead of New Year celebration

A customer selects one-carat gold bangles during an exhibition in Jammu April 13, 2008.Amit Gupta/Files

MUMBAI (Reuters) - Gold demand in India, the world's biggest buyer of the metal, was weak on Monday due to year-end, and as prices nudged higher following gains in the world market.

* The actively traded gold contract for February delivery on the Multi Commodity Exchange (MCX) was 0.17 percent higher at 30,748 rupees per 10 grams as of 3:25 p.m.

* "Buying is very thin. People are busy with New Year celebration plans. Jewellers are also not active in the market," said a Mumbai-based dealer with a state-run bank.

"For the last few days prices are moving in a narrow-range. Breakout is needed on either side to attract buyers."

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

* Overseas gold ticked up to around $1,663 an ounce and was on track for a twelfth straight annual gain, although wary investors stayed on the sidelines as last-ditch attempts to resolve a U.S. fiscal crisis seemed to be getting nowhere.

* The March silver contract on the MCX rose 0.24 percent to 57,801 rupees per kg.

Reporting by Rajendra Jadhav; Editing by G.Ram Mohan

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