MUMBAI: India's gold futures extended gains for a second session on Wednesday afternoon tracking firm overseas leads, and traders were unwilling to place orders and get stuck with high-priced stocks in the middle of the seasonally lean period.
"There were a few stray deals in the morning and rupee is in supporting mode," said a dealer with state-run bullion dealing bank. The most-active August contract on the Multi Commodity Exchange (MCX) was trading 0.47 per cent higher at Rs 18,719 per 10 grams at 2:41 pm, after gaining 0.5 per cent in the previous session.
However, a stronger rupee, which makes the dollar-denominated yellow metal cheaper, kept a lid on gains. The Indian rupee was trading marginally stronger, as the domestic sharemarket shed most of its losses, while the dollar's drop versus majors also helped sentiment.
"Imports are not happening, most scrap is used to meet demand in the current slack season," said another dealer with a private bank, adding "any corrections to Rs 18,200-18,500 would be bought."
The onset of monsoon typically crimps gold demand in India as rural households, which account for 65 per cent of total gold buying, use funds to buy seeds and fertiliser. Gold imports into India may fall to less than 15 tonnes from 29.9 tonnes a year earlier as near-record prices and the onset of monsoon dent demand, a trade body official said.
