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Gold demand sluggish as prices move higher

Source : REUTERS
Last Updated: Tue, Jan 01, 2013 12:05 hrs
A salesgirl shows a gold necklace to customers at a jewellery showroom in Chandigarh

Gold demand in India, the world's biggest buyer of the metal, remained subdued on Tuesday as prices moved higher tailing gains in overseas prices late on Monday.

Overseas gold jumped on the last trading day of 2012 to finish up 6 percent on the year on news of a possible U.S. fiscal deal, which lifted a market that had rallied earlier in the year on low interest rates, euro zone worries and central bank demand for bullion.

The actively traded gold contract for February delivery on the Multi Commodity Exchange (MCX) was 0.17 percent higher at 30,912 rupees per 10 grams as of 1052 GMT.

"Investment demand is weak as people are not expecting much upside in prices. Jewellers are also on sidelines," said a Mumbai-based dealer with a private bank.

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

The March silver contract on the MCX rose 0.07 percent to 57,905 rupees per kg.

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