MUMBAI: Gold traders in the country, the world's biggest buyer of the metal, continued to pick up bargains for a second consecutive week fearing further price rise, after prices rose nearly 1 per cent from the lowest level in more than 18 months.
An 11 per cent slump in gold prices since last week released years of pent-up demand, resulting in a supply shortage in the physical market, triggering higher premiums.
"There are a lot of deals as people are comfortable at these levels ... All are saying prices may go up any time," said a dealer with a state-run bullion importing bank.
However, the government has been trying to keep a lid on bulging imports to counter the record high current account deficit.
The actively traded gold for June delivery on the Multi Commodity Exchange (MCX) was Rs 249 higher at Rs 26,296 per 10 grams at 0849 GMT, after hitting a low of Rs 25,270, a level last seen in September 2011.
The rupee, which weakened on Monday, plays an important role in determining the landed cost of the dollar-quoted yellow metal.
Gold in the overseas market jumped more than 2 per cent after a rebound above $1,400 ignited technical buying, but sentiment was shaky as steady outflows from exchange-traded funds trimmed their bullion holdings to the lowest in three years.
May silver on the MCX was Rs 215 higher at Rs 43,638 per kg.
