December 26, 2012 / 10:42 AM / 5 years ago

Gold demand in India rises on price fall

MUMBAI (Reuters) - Gold demand in India, the world’s biggest buyer of the metal, rose on Wednesday as prices eased following a drop in the world market and on a firm rupee.

A salesgirl shows a gold necklace to customers at a jewellery showroom in Chandigarh November 11, 2012. REUTERS/Ajay Verma/Files

The actively traded gold contract for February delivery on the Multi Commodity Exchange (MCX) was 0.48 percent lower at 30,705 rupees per 10 grams as of 0951 GMT.

“Jewellers are restocking due to price corrections. Most buyers are comfortable with the current price,” said a Mumbai-based dealer with a state-run bank.

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

Overseas gold slipped in thin trade as uncertainty over whether the United States would be able to avoid a fiscal crisis kept investors at bay, but lower prices spurred buying from jewellers.

The March silver contract on the MCX was down 0.36 percent at 57,520 rupees per kg.

Reporting by Rajendra Jadhav; Editing by Subhranshu Sahu

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