Gold flat near 10-month low; traders pick up bargains
Indian gold traded steady near its lowest level in 10 months as support from a weaker rupee was offset by falling overseas markets, with traders continuing to pick up bargains to meet wedding season demand.
At 9.12 p.m., the actively traded gold for June delivery on the Multi Commodity Exchange (MCX) was Rs 74 higher at Rs 29,310 per 10 grams, recovering after hitting a low of Rs 29,132 earlier, a level last seen in early June.
The rupee, which hit its lowest level in a month, plays an important role in determining the landed cost of the dollar-quoted yellow metal.
Gold in the overseas market extended earlier losses below $1,540 an ounce on Thursday, hitting its lowest since May.
"Demand is moderate as prices have fallen. If prices fall further we should see good wedding demand," said Mayank Khemka, managing director of Khemka Group, a wholesaler in New Delhi.
Weddings will start in India, the world's biggest buyer of gold, and continue till early June. Festivals will also take place during this period.
India has been trying to curb imports to put a lid on the record-high current account deficit. The federal government raised the import duty on gold, which it called a dead investment, by 50 per cent to 6 per cent in January.
Finance Minister P. Chidambaram suggested on Tuesday that the government was unlikely to raise the import tax on gold further to avoid gold smuggling.
Silver for May delivery on the MCX was 0.25 per cent higher at Rs 50,851 per kilogram.
Copyright @ Thomson Reuters 2013