MUMBAI: Gold moved higher on Tuesday afternoon, helped by the rupee, which hit its lowest level in two years, making the dollar-quoted yellow metal expensive, dealers said.
* At 2:24 p.m., the most-active gold for October delivery on the Multi Commodity Exchange (MCX) was 0.74 per cent higher at 27,869 rupees per 10 grams.
* The Indian rupee fell to its lowest in two years as investors plumbed for the dollar's safety after rating agency S&P downgraded Italy, deepening fears over Europe's sovereign debt crisis.
* Global gold held steady after Standard and Poor's downgrade of Italy's credit rating heightened worries about the euro zone debt crisis ahead of a key US Federal Reserve policy meeting.
* Investors are eager to learn if the US central bank will embark on more stimulus measures to spur economic growth, as policy makers meet on Tuesday and Wednesday. Another round of quantitative easing would likely buoy gold, as the prospect of cheap cash increases inflation outlook.
* Physical buying retreated this week as prices moved higher.
* "Buying is not that much because of the rupee. Demand is also not there as Shradh is going on," said a dealer with a state-run importing bank. It may pick up because of auspicious buying on Navratri, which falls on Sept. 28.
* Shradh is a period when Indians pay homage to ancestors, and will last through Sept. 27.
* Festival and wedding demand in India, the world's biggest bullion consumer, will gain pace and peak in October and November, before tapering off in December.
