October 18, 2011 / 9:27 AM / 7 years ago

India gold falls more, weak rupee caps downside

Customers look at gold bangles inside a jewellery shop in Hyderabad September 8, 2009. REUTERS/Krishnendu Halder/Files

MUMBAI (Reuters) - India gold futures extended losses on Tuesday afternoon in tandem with foreign markets, although a weaker rupee kept the downside limited.

* The most-active gold for December delivery on the Multi Commodity Exchange was 0.53 percent lower at 26,682 rupees per 10 grams.

* Global gold prices eased slightly, retreating with risk assets after China’s economic growth eased to its slowest in more than two years and Germany cautioned against expectations of a quick cure to euro zone’s debt crisis.

* International gold was down at $1,659.59/1,661.00 an ounce, down from the previous close of $1,670.90/1,671.65.

* The rupee weakened dragged by weak domestic equities, a lacklustre euro and some dollar demand from domestic oil companies.

* Physical traders continued to book deals, though in low quantities, ahead of a slew of festivals later in the month.

* “There are some deals at below $1,660 (an ounce),” said a dealer with state-run bullion importing bank in Mumbai.

* “Demand is good for the upcoming festival season and market needs a heavy correction before going high,” said Chanda Venkatesh, managing director with CapsGold, a bullion merchant in Hyderabad.

* Gold demand in India, the world’s largest bullion buyer, will be strong in October-December, a traditional time for festivals and weddings, despite high inflation that eats into savings and multiple growth-choking central bank rates hikes.

Reporting by Siddesh Mayenkar; Editing by Rajesh Pandathil

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