Gold importers retreat as rupee weakens

Gold importers in India, the world's biggest consumer of the metal, retreated as a weaker rupee limited the downside in prices, despite weak overseas markets.

After a 50 per cent import duty hike to 6 per cent on January 21, the Reserve Bank of India last week recommended putting curbs on imports, along with launching gold-linked products to limit shipments. Wedding and festival season are currently underway in India.

The most-active gold for April delivery on the Multi Commodity Exchange (MCX) was 0.08 per cent lower at Rs 30,617 per 10 grams.

"Buying is there, but not in a big way as rupee has depreciated and overall costing remains in the same range. People are hoping to buy below Rs 30,000," said a dealer with a private bullion importing bank in Mumbai.

The rupee, which traded weaker, plays an important role in determining the landed cost of the dollar-quoted yellow metal.

Overseas gold extended losses to hit its weakest in more than a month in holiday-thinned trade.

Silver for March delivery on the MCX was 0.39 per cent lower at Rs 57,435 per kg.

Copyright @ Thomson Reuters 2013