Gold futures hit four-week low; premiums stay at peak
Gold futures in India extended losses to hit their lowest level in four weeks, weighed by a strong rupee, though a firm overseas market kept the downside limited.
The most-active gold for February delivery on the Multi Commodity Exchange (MCX) was 0.27 percent lower at 29,126 rupees per 10 grams at 1007 GMT, after hitting a low of 29,025 rupees, a level last seen on November 17.
Silver for March delivery on the MCX was 0.43 percent lower at 44,271 rupees per kg.
The rupee, which was firm on Friday, plays an important role in determining the landed cost of the dollar-quoted yellow metal.
In the domestic market, lack of stocks to meet firm wedding demand kept premiums supported at the peak of about $160 an ounce on London prices.
"There is recycling going on, jewellers are unable to source supplies properly through official channels," said Rammohan Kamath, secretary of Calicut Bullion Dealers Association.
To cut a record trade deficit, India slapped a record 10 percent duty on gold imports and tied imports for domestic consumption with exports, leading to a scarcity of gold in the local market.
The World Gold Council (WGC) cut its forecast for Indian gold demand earlier this month to 900 tonnes from the earlier 1,000 tonnes, predicting the country could also lose its place as the world's biggest consumer of bullion to China.
Copyright: Thomson Reuters 2013
