MUMBAI: Gold buying retreated on Wednesday afternoon as traders sought price falls to replenish stocks for the upcoming festivals in August, dealers said. "Buying receded after prices moved above $1,190 (an ounce) last evening, even the rupee is not acting in favour," said a dealer with a state-run bank in Mumbai, which deals in bullion.
International gold, which guides the domestic markets, was trading at $1,188/1,189 an ounce as against the previous close of $1,191.4/1,192.4. Gold prices eased below $1,190 in Europe as a recovery in assets seen as higher risk, like equities, oil and the euro, signalled a retreat in risk aversion.
"If prices fall below $1,175, then most of my buy deals would get triggered," said another dealer with a private bullion dealing bank. India, which accounts for more than 20 percent of global demand, will celebrate the Hindu festival of Raksha Bandhan on Aug. 24, and Janmasthami and Ganesh Chaturthi in September.
The world's largest consumer of bullion may import 500-550 tonnes of gold in 2010, up from 480-490 tonnes a year earlier, the head of a trade body said last week. Prices being quoted by HDFC Bank in rupees in the spot market at 1:15 p.m. Gold .999/10 grams 18,512 18,366 Silver .999/kg 29,525 29,256.
On the Multi Commodity Exchange of India Ltd. at 2:03 p.m. Aug gold 18,328 -11 Sept silver 28,630 unchanged.
