Gold futures recover from over one-week low

NDTV Profit Desk

17 Dec 2013, 02:20 PM IST

Gold futures in India recovered on Tuesday from their lowest level in more than a week, helped by a weaker rupee with physical traders still struggling to get supplies despite paying high premiums.

The most-active gold for February delivery was 0.38 per cent higher at Rs 28,941 per 10 gram on the Multi Commodity Exchange at 1.35 pm, after hitting a low of Rs 28,752 earlier in the day, a level last seen on December 6.

Silver for March delivery was 0.24 per cent higher at Rs 45,437 per kg.

The rupee, which plays an important role in determining the landed cost of the dollar-quoted yellow metal, was down on Tuesday.

In the domestic market, buying remained subdued due to non-availability of stocks, supporting premiums.

"Most of the demand is being met by recycled gold... We don't prefer paying high premiums to MMTC," said Kumar Jain, vice-president of the Mumbai Jewellers Association. MMTC is a state-run gold importer.

Indian gold imports may fall 70 per cent in the final quarter of 2013 from 255 tonnes in the year-ago period and are expected to be half the usual levels at 500-550 tonnes next year if new import rules are maintained, a top trade body official said.

To curb a rising trade gap, the Indian government slapped a record import duty of 10 per cent, and tied imports for domestic consumption with exports.

India will keep a tight leash on gold imports despite a recent improvement in its trade deficit and lobbying by a bullion industry struggling with high premiums and a supply crunch.