India gold rises; physical buying remains weak
India gold rose tracking overseas leads on Thursday afternoon, and domestic buying remained weak in a seasonally lean period, with traders eyeing the movement in rupee for direction, dealers said.business Updated: Jun 17, 2010 16:06 IST
India gold rose tracking overseas leads on Thursday afternoon, and domestic buying remained weak in a seasonally lean period, with traders eyeing the movement in rupee for direction, dealers said.
"At the retail level, they are offering discounts of 200-300 rupees (per 10 grams)... but no one is interested," said a dealer with a state-run bank in Mumbai.
The most-active gold August contract was trading 0.30 per cent higher at 18,685 rupees per 10 grams at 2:23 pm, after hitting a high of 18,745 rupees earlier. Prices are still below the all-time high of 19,198 rupees struck last week.
"We are selling, but in very minimal quantity, like we did only 50 grams since morning at 1,233/1,234 (an ounce)," said another dealer with a private bank.
International gold was trading at $1,232.10/1,232.90 an ounce as against the previous close of $1,229.60/1,233.60 on Wednesday.
Gold firmed in Europe as investors worried about sovereign debt levels in the euro zone sought out the metal as a safe haven, with losses on the equity markets pointing to softer appetite for risk.
The rupee plays a pivotal role in determining the landed cost of the yellow metal, which is quoted in dollars.
The Indian rupee continued to trade largely steady tracking a choppy domestic sharemarket and the dollar's gains against major currencies.
The onset of monsoon typically crimps gold demand in India as rural households, which account for 65 percent of total gold buying, slows as farmers use funds to buy seeds and fertiliser.
Gold imports into India may fall to less than 15 tonnes from 29.9 tonnes a year earlier as near-record prices and the onset of monsoon dent demand, a trade body official said.