December 21, 2012 / 10:53 AM / 5 years ago

Gold prices drop to four-month low

MUMBAI (Reuters) - Gold demand in India, the world’s biggest buyer of the metal, improved on Friday as prices in the spot market fell to a near four-month low, luring jewellers preparing for the wedding season.

A saleswoman displays a gold necklace at a jewellery showroom in Kolkata August 1, 2011. REUTERS/Rupak De Chowdhuri/Files

* The yellow metal was trading around 30,638 rupees per 10 grams, the lowest since August 30, in the spot market.

* “Jewellers are active in the market. Investment demand is still weak,” said a Mumbai-based dealer with a state-run bank.

* “Gold is trading above 30,000 rupees. If it falls below 30,000 rupees, then we can see a significant improvement in retail demand. Sentiments will change,” the dealer said.

* The wedding season will continue till early January and gold is an important gift item at marriages.

* The actively traded gold contract for February delivery on the Multi Commodity Exchange was 0.85 percent higher at 30,740 rupees per 10 grams as of 3:50 p.m., after falling to 30,370 rupees on Thursday night.

* The rupee, which fell nearly 1 percent on Friday, plays an important role in determining the landed cost of the dollar-quoted yellow metal.

* Overseas gold slipped, holding near a four-month low hit in the previous session and on track for its steepest weekly drop since June, as the euro softened and U.S. talks to avoid a fiscal crisis stalled again.

* March silver contract was up 0.98 percent at 57,915 rupees per kg.

Reporting by Rajendra Jadhav; Editing by Subhranshu Sahu

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