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Gold demand remains subdued as prices near two-week high

Source : REUTERS
Last Updated: Fri, Jul 12, 2013 11:56 hrs
An employee arranges gold jewellery in the counter as her arm is reflected in the mirror at a gold shop in Wuhan

Mumbai: Gold demand in India, the world's biggest buyer of the metal, continued to remain subdued on Friday even as prices hovered near their highest level in two weeks.

Gold imports into India fell 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 coming months, creating problems for a government battling a record high trade deficit.

"There is no demand or supply... no one is buying at these levels," said Suresh Jain, director of Bombay Bullion Association.



A trade ministry official said on Friday it was too early to say whether the decline in gold imports can continue.

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 await guidelines from the central bank on imports on cash basis after a ban on consignment basis.

Gold prices eased from their highest level in two weeks in line with global markets.

The actively traded gold for August delivery on the Multi Commodity Exchange (MCX) was 0.21 percent lower at 26,620 rupees per 10 grams, easing from the previous day's high of 26,858 rupees, a level last seen on June 25.

Silver for September delivery on the MCX was 0.64 percent lower at 41,430 rupees per kg.

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