Gold demand drops ahead of New Year celebration

Last Updated: Mon, Dec 31, 2012 10:43 hrs

Gold demand in India, the world's biggest buyer of the metal, was weak on Monday due to year-end, and as prices nudged higher following gains in the world market.

The actively traded gold contract for February delivery on the Multi Commodity Exchange (MCX) was 0.17 percent higher at 30,748 rupees per 10 grams as of 3:25 p.m.

"Buying is very thin. People are busy with New Year celebration plans. Jewellers are also not active in the market," said a Mumbai-based dealer with a state-run bank.

"For the last few days prices are moving in a narrow-range. Breakout is needed on either side to attract buyers."

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

Overseas gold ticked up to around $1,663 an ounce and was on track for a twelfth straight annual gain, although wary investors stayed on the sidelines as last-ditch attempts to resolve a U.S. fiscal crisis seemed to be getting nowhere.

The March silver contract on the MCX rose 0.24 percent to 57,801 rupees per kg.

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