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Gold demand weak as buyers seek stability in rupee
September 17, 2012 / 10:13 AM / 5 years ago

Gold demand weak as buyers seek stability in rupee

Gold bars are displayed at a gold jewellery shop in Chandigarh May 8, 2012. REUTERS/Ajay Verma/Files

MUMBAI (Reuters) - Gold demand in India, the world’s biggest consumer, was subdued on Monday as buyers waited for the rupee to stabilise before making purchases for the festive season.

* The most-traded gold contract, for October delivery, was down 0.13 percent at 31,840 rupees per 10 grams by 0944 GMT, after hitting a record high of 32,421 rupees late on Thursday.

* “The sharp rise in the rupee was a surprise for buyers. They bought gold aggressively on Friday, but are now waiting for the rupee to stabilize,” said a Mumbai-based dealer with a private bank.

* The rupee rose to a four-month high in early trade on Monday in hopes of major foreign inflows after the federal government announced the opening up of the aviation and multi-brand retail sectors to overseas direct investment.

* A strong rupee makes imports of gold cheaper.

* “Buyers are not expecting prices to move higher in the world market. The market has factored in the impact of the Federal Reserve’s stimulus programme,” the dealer said.

* In the international market, spot gold eased to $1,767.59 an ounce.

* India celebrates the Ganesh festival this week, which will be followed by Dussehra in October and Diwali in November. Buying gold during festivals is considered auspicious.

Reporting by Rajendra Jadhav; Editing by Anupama Dwivedi

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