Gold prices down; demand remains weak

Gold demand in India, the world's biggest buyer of the metal, remained weak on Thursday even as prices eased from their highest level in a week.

The Reserve Bank of India has banned banks, along with state-run and private trading agencies, from importing gold on a consignment or payment of margin basis, making it difficult for small jewellers to source supplies on cash payment. The government also raised the import duty on gold to 8 per cent.

"There is no demand at all and there are no supplies," said Ashok Jain, partner at Mumbai-based wholesaler Chenaji Narsinghji Bullion.

Gold prices eased from their highest level in a week, tracking global leads and a firm rupee back home.

Gold for August delivery on the Multi Commodity Exchange was 0.44 per cent lower at Rs 26,180 per 10 grams at 1110 GMT, after hitting a high of Rs 26,430, a level last seen on June 26.

"Prices are expected to remain steady between 25,000 and 27,000," said Mr Jain.

Silver for July delivery on MCX was 1.01 per cent lower at Rs 41,111 per kilogram.

Copyright: Thomson Reuters 2013