August 24, 2009 / 8:40 AM / 10 years ago

UPDATE 1-India gold demand remains slack on high prices

(Updates to trends in the physical market)

* Spot gold lower at $954.40 an ounce XAU=

* London Brent crude up at $74.27 a barrel LCOc1

* Rupee strong at 48.53 per dollar INR=IN

MUMBAI, Aug 24 (Reuters) - India gold demand remained weak on Monday as traders were reluctant to take positions with prices above the keenly-watched 15,000-rupees mark, dealers said.

The most-traded October contract MAUV9 was 0.19 percent higher at 15,025 rupees per 10 grams, after hitting a high of 15,040 rupees, a level last seen on Aug. 6.

“The market has turned absolutely dull after Friday’s spike in prices,” said Pinakin Vyas, chief-manager, treasury, at IndusInd Bank in Mumbai.

The contract had gained 0.7 percent on Friday, when strong crude after the robust U.S. home sales data, spurred buying in the yellow metal.

“Even a strong rupee is not helping,” said Vyas.

The Indian rupee climbed to a one-week high on hopes a global economic recovery would fuel demand for local stocks, but rising global commodity prices may check sharp gains.

A strong rupee makes the dollar-quoted asset cheaper.

Dealers said the underlying demand is still strong as traders would seek to replenish stocks for the festive demand.

“If the rupee holds well and gold comes down to around $940 (an ounce), we might see some activity in the market,” said another dealer with a state-run bank.

India is celebrating Ganesh Chathurthi, the first in a series of festivals, which is expected to revive gold’s physical off take.

Following were the prices being quoted by HDFC Bank in rupees in the spot market at 1:15 p.m. INBULL03:

Monday Friday

================================================

Gold .999/10 grams 15,187 15,068

Silver .999/kg 24,410 23,825

Following were prices in rupees on the Multi Commodity Exchange of India Ltd. at 2:01 p.m. <0#MAU:>:

Contract Current price Net change

======================================================

Oct gold 15,026 +29

Sept silver 23,438 +336

Reporting by Siddesh Mayenkar; Editing by Harish Nambiar

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