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Money News

Gold demand stays subdued as rupee falls further

A shopkeeper waits for customers at his gold and silver jewellery shop in the old quarters of Delhi October 7, 2013. REUTERS/Mansi Thapliyal/Files

MUMBAI (Reuters) - Gold demand in India remained sluggish on Tuesday as jewellers were not interested in placing orders due to a depreciating rupee and as retail demand tapered after the peak festive season earlier this month.

* India celebrated Dhanteras, the biggest gold buying festival, and Diwali earlier this month, when scarcity of the yellow metal and higher prices pushed consumers to buy silver and diamond jewellery.

* The wedding season is underway in the world’s biggest consumer of gold.

* The most-active gold contract for December delivery was 0.19 percent higher at 30,201 rupees per 10 gram at 0931 GMT on the Multi Commodity Exchange (MCX).

* “Demand is weak. Jewellers are not comfortable at the current level due to a weak rupee. Since retail demand has gone down, they are not in a hurry to make purchases,” said a Mumbai based dealer with a private bank.

* The rupee hit a two-month low on strong dollar demand from corporates. A weak rupee makes imports of gold and silver expensive. <INR/>

* Overseas gold hit a fresh 3-1/2-week trough below $1,300 on Tuesday as investors fretted over the timing of the U.S. Federal Reserve’s stimulus tapering, while physical demand was not strong enough to put a floor under prices.

* Silver contract for December delivery was 0.48 percent lower at 48,140 rupees per kg on the MCX.

($1 = 63.7 rupees)

Reporting by Rajendra Jadhav; Editing by Anand Basu

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