Rs. breaches 51 against US$, aids gold buying ahead of festivals

As a weakening dollar aided purchases, consumers bought gold on Thursday, pushing up overseas prices as experts said the demand will increase more by the end of October during the upcoming festival season, HT reports.

As a weakening dollar aided purchases, consumers bought gold on Thursday, pushing up overseas prices as experts said the demand will increase more by the end of October during the upcoming festival season. A strong rupee makes gold imports cheaper.

Though in the Mumbai spot market the yellow metal lost Rs. 125 to touch Rs. 31,575 per 10 grams, overseas it gained 0.5% to $1,786.22 an ounce.

Traders said the subdued demand at prevailing higher levels was mainly due to the start of "Shradhs", a period considered inauspicious in Hindu mythology for purchasing new things.

Silver also lost Rs. 400 to touch Rs. 60,600 per 1 kg.

For the December 2012 futures, gold was trading at Rs. 31,312 on the Multi Commodity Exchange.

Gold prices have been rising since September as falling currencies force investors to seek safe havens.