Gold price consolidation triggers more physical buying

Last Updated: Thu, Apr 18, 2013 10:34 hrs

Indian gold futures edged down, hovering near their lowest level in more than 18 months, weighed by a stronger rupee, giving an opportunity for physical traders to import in the middle of the wedding season. Prices, however, recovered later.

The actively traded gold contract for June delivery on the Multi Commodity Exchange (MCX) was 52 rupees higher at 25,731 rupees per 10 grams, after hitting a low of 25,333 rupees earlier in the session, still near the level last seen in September 2011.

India, the world's biggest buyer of gold, will celebrate Akshaya Tritiya, a key gold buying festival, next month. The wedding season has also begun and will continue till early June.

"Deals are there as gold and rupee are correcting. Indications are total imports in April so far has jumped to 15 tonnes, much higher than the previous month," said a dealer with a state-run bullion dealing bank.

The rupee, which plays an important role in determining the landed cost of the dollar-quoted yellow metal, extended gains after higher than estimated exports of $300 billion in the last fiscal.

In the overseas market, gold slipped as much as 2.7 percent on Thursday as losses in other markets, prospects for easing inflation, and worries about central bank sales drove investors to sell bullion to raise cash, undermining the metal's status as a safe-haven investment.

Silver for May delivery on the MCX was 46 rupees higher at 43,670 rupees per kg.

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