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Gold buying slows as prices move sideways

Source : REUTERS
Last Updated: Wed, Jan 09, 2013 09:54 hrs
A salesman arranges gold necklaces at a jewellery showroom in Chennai

Gold buying by traders in India, the world's biggest consumer of the metal, slowed as prices were stuck in a range for a third day in a row after overseas leads outweighed a stronger rupee back home.

The wedding season will re-start in India by mid-January and will continue until May. Festivals will also take place during this period.

The most-active gold for February delivery on the Multi Commodity Exchange (MCX) was 0.18 percent lower at 30,918 rupees per 10 grams at 2:44 p.m., after trading in a tight range of 30,821-31,058 rupees in the previous three sessions.

"Market has slowed as everyone is waiting for correction," said Ketan Shroff, director, Mumbai-based wholesaler Penta Gold, adding "If there is correction, people will be able to digest the price post the duty hike."

India could raise the import duty on the yellow metal from the current 4 percent, as part of measures to contain a record high current account deficit. The central bank has also recommended limits on value and volumes of gold imports.

Overseas gold held around $1,660 an ounce on Wednesday as investors awaited policy decisions by central banks in Japan and the euro zone.

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

Premiums stayed steady at $2-3 an ounce on London prices, a level last seen in November last year.

March silver edged 0.17 percent lower to 58,369 rupees per kg.

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