MUMBAI: India gold buying edged up as traders stocked for festivals after domestic prices eased from their record high, though a weaker rupee limited the downside, dealers said.
"There is buying. Jewellers, who used to buy 20 kgs are buying 5 kg, as prices are a bit lower," said a dealer with a state-run gold importing bank in Mumbai.
Local gold on the Multi Commodity Exchange (MCX) was trading 0.31 percent lower at 19,396 rupees per 10 grams at 1:01 p.m., still down 1.8 percent from an all-time high of 19,744 rupees struck in the previous session.
"There are plenty of orders downwards, a fall of 500 rupees could revive demand," said another dealer with a private bullion dealing bank. However, a weaker rupee, which makes the dollar-quoted asset expensive, kept the downside limited, dealers said. "I have many orders below $1,324 (an ounce), If rupee apprecaites, then they may revise their orders," said the bank dealer.
The Indian rupee weakened tracking Asian peers and marginally lower domestic shares, but is seen supported by the dollar's fall against majors globally on bouts of profit-taking and robust foreign fund inflows.
Festival demand will peak on Dhanteras slated in November, when jewellers register the highest sales every year. Weddings also take place during the festival season. This has prompted MMTC Ltd. , the country's second-largest gold importer, to increase December quarter imports by 37 percent to 55-60 tonnes.
