|Chennai||Rs. 28730.00 (1.13%)|
|Mumbai||Rs. 29740.00 (-0.13%)|
|Delhi||Rs. 29200.00 (0%)|
|Kolkata||Rs. 29350.00 (0%)|
|Kerala||Rs. 28000.00 (0%)|
|Bangalore||Rs. 28400.00 (0%)|
|Hyderabad||Rs. 28470.00 (-0.11%)|
Gold traded in a tight range near $1,775 per ounce on Tuesday, after dropping for two straight sessions, as a firm dollar amid persistent worries about the euro zone debt crisis and global growth kept a lid on gains.
But speculative interest in gold remained strong as stimulus measures launched by key central banks in September continued to drive investors to gold, a hedge against inflation and currency debasement caused by looser monetary policy.
Holdings in the gold-backed exchange-traded funds rose to a historic high of 74.73 million ounces by October 7, up 6 percent over the past two months during which gold prices climbed nearly 10 percent.
But higher prices have curbed physical demand in Asia, especially as a global slowdown has started to impact the economies in the key gold consumers in the region, including China and India.
"The jewellery sector has been badly affected, as people are reluctant to spend," said a Singapore-based trader. "The lack of physical demand is worrying."
The recent price rally, up nearly 10 percent over August and September, has triggered a wave of scrap selling in Southeast Asia. In major consumer India, festival season demand may fall short of last year, he added.
Many buyers, however, are waiting on the sidelines for the next price dip, as price outlook remains bullish for gold.
"People will quickly come back to the market when prices drop $30 to $50, and we'll see gold breaking above $1,800 by the end of the year after a healthy correction," the Singapore-based trader said.
Spot gold was little changed at $1,775.46 an ounce by 0635 GMT, rebounding from a one-week low of $1,766.14 hit on Monday. Gold fell almost 1 percent over the last two sessions, its sharpest two-day decline since August.
U.S. gold crawled up 0.1 percent to $1,777.60.
Technical analysis suggested that spot gold is biased to retrace to $1,757 an ounce during the day, said Reuters market analyst Wang Tao.
EURO ZONE IN FOCUS
The deepening crisis in Spain and Greece kept investors on their toes, lifting the dollar index from a two-week low as the greenback's safe-haven allure attracts investors during economic distress.
Equities, oil and base metals strengthened, but gains were capped by concerns over global growth prospects, after the World Bank cut its economic growth forecasts for the East Asia and Pacific region.
"Things have looked better for gold after the Federal Reserve launched a new round of quantitative easing, but right now we seem to be in a consolidation mode," said Dick Poon, manager of precious metals in Hong Kong.
Poon said physical demand was lacklustre, and the premium for gold bar in Hong Kong was about 50 cents above London prices.
The labour strife in South Africa showed no sign of abating, with Xstrata's Eland platinum mine being the latest to be hit by the illegal strike.