MY: India gold demand stays weak as prices hit 6-week high
India gold buying stayed weak for a fourth session on Monday as prices extended gains to hit its highest level in six weeks, with traders watching the rupee for direction, dealers said.
"My other centres are not active, although I saw a few from Mumbai... even prices have jumped about Rs 600 (per 10 grams)," said a dealer with a state-run bullion dealing bank.
Gold futures on the Multi Commodity Exchange (MCX) extended gains to hit an over-1-month high tracking overseas markets, where a weak dollar supported the yellow metal.
The most-active October contract was trading 0.41% higher at Rs 18,642 per 10 grams at 1:34 pm, after hitting a high of Rs 18,645, the loftiest level since July 1.
The Indian rupee recouped most of its early losses by mid-morning on Monday as the domestic stock market edged up after a weak open, but losses in regional peers continued to exert downward pressure on the local unit.
The rupee plays an important role in determining the landed cost of the yellow metal, which is quoted in dollars.
Indian gold demand is set to pick up for the busy festival season, starting with Raksha Bandhan on August 24, and extending till Dhanteras in November, the single biggest gold-buying day.
"I have 40 kgs to cover if prices fall to USD 1,211-1,216 an ounce and much more if it moves below USD 1,200," said another dealer with a private bank, which deals in bullion.
