Gold prices in India fell today, extending losses for a fifth session in a row to its lowest level in nearly five weeks weighed by a stronger rupee, attracting importers seeking to stock the yellow metal for festivals.
The most-active gold for December delivery on the Multi Commodity Exchange (MCX) struck an intra-day low of Rs 31,212 per 10g, a level last seen on August 31, before trading 0.25 per cent lower at Rs 31,234.
"We have seen some steady demand for the last couple of weeks on the back of a stronger rupee," said a dealer with a private bullion importing bank in Mumbai, adding, "We will have to wait and see the sustainability." The festival and wedding season in India, the world's biggest buyer of bullion, will start in late October and will peak at next month's Diwali and Dhanteras, traditionally marked by a frenzy of purchases of gold as gifts and dowry.
The rupee, which has strengthened six per cent since the start of September, has kept the prices of yellow metal subdued in the face of firm markets abroad. Silver edged higher following copper, another industrial metal. Silver for December delivery on the MCX was 0.3 per cent higher at Rs 62,483 rupees per kg.
Gold jumps in London
Gold jumped in London on signs of more demand in India, the biggest buyer, and a weakening dollar.
UBS AG said its physical gold sales to India were the most since April yesterday because of the strengthening rupee. India’s currency rose for a fifth day today against the dollar. Gold rose 14 per cent this year as the Dollar Index, which tracks the US currency against six monies, declined 0.5 per cent.
“Because of the rupee, there was physically related buying coming in,” said Afshin Nabavi, a senior vice president at bullion refiner MKS Finance SA in Geneva. “I think the dollar could help.”
Gold for immediate delivery climbed 0.5 per cent to $1,786.22 an ounce in London. The futures jumped 0.5 per cent to $1,789.20 an ounce on Comex in New York.