Gold buyers prefer to stay on sidelines

Last Updated: Wed, Jul 10, 2013 10:21 hrs

Gold traders in India, the world's biggest buyer of the metal, stayed on the sidelines in a seasonally weak demand period, while prices remained steady near their highest level in a week.

Gold imports into India declined about 81 percent on month to 31.5 tonnes in June after the government raised import duty and stopped consignment imports, but demand could rise in the coming months, creating problems for a government battling a record high trade deficit.

"Supply and demand have slowed and will remain the same way for another 15 days," said Suresh Jain, proprietor with wholesaler SJ Jain Jewellers in Mumbai, adding demand will revive partially in the first week of August, when festival season starts.

Most of the demand is met by state-run trading agencies such as MMTC, State Trading Corp, and PEC, along with Scotia Bank, while other private and public banks are waiting for guidelines from the central bank on imports on cash basis after a ban on consignment basis.

Gold prices stayed near their highest level in a week.

At 2.36 p.m., the actively traded gold contract for August delivery on the Multi Commodity Exchange (MCX) was 0.64 percent higher at 26,177 rupees per 10 grams in line with overseas trend.

The contract was still hovering near their previous day's high of 26,296 rupees, a level last seen on July 3.

Silver contract for September delivery was trading 0.27 percent higher at 40,276 rupees per kilogram.

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