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Bullion punters see the rupee remaining stable or strengthening in the coming weeks. Indications on this were available from over one per cent discounts in far-month gold futures on the Multi Commodity Exchange (MCX) on Wednesday. October futures, which will expire on MCX on October 5, was quoted at Rs 30,055 per 10g and December futures was trading at Rs 29,725, or at a discount of Rs 330 per 10g. In Mumbai’s spot market, gold on Wednesday closed Rs 160 higher at Rs 29,980 per 10g.
“This is a currency play, traders are expecting that till the US Federal Reserve actually announces tapering of its bond-buying programme, the dollar will remain weak, which means the rupee will strengthen or remain stable,” said Naveen Mathur, associate director - commodities and currencies, Angel Broking. Next meeting of the Fed is scheduled in October-end, when the US central bank may cut bond-buying or differ it to December.
With gold prices in the international market remaining stable for the past few days and the rupee also stable with a bias to rise, punters seem to have gone long in gold. Another reason for current month premium remaining higher is higher premium in the spot market for physical delivery. A trader said spot prices were quoted at a premium of Rs 500 per 10g, as physical delivery was not available according to demand and smuggled gold was selling at landed cost of official imports, or at Rs 450-500 discount to spot prices.
Imports have begun in a small way and after last week’s clarifications, some imported consignments have been released by the customs and more stock will enter in the Mumbai market in coming days. Even banks are beginning to import gold, which should put premiums under check in the coming days.
