Indian gold prices rebound; jewellers stocking up for festivals

October 05, 2013


Indian gold futures rebounded on Thursday from their lowest level in two weeks, tracking gains in overseas prices, though a strong rupee limited the upside. Despite the price rise, demand improved slightly as jewellers were seen placing orders for the peak festive season.

At 0927 GMT, the benchmark October gold contract on the Multi Commodity Exchange (MCX) was 1.21 percent higher at 29,886 rupees per 10 grams. It hit a low of 29,352 rupees on Tuesday, a level last seen on September 18. India will celebrate the Hindu festivals of Dussehra in the third week of October and Diwali in the first week of November, a period when buying gold is considered auspicious. Some banks, which are primary dealers of bullion, re-started imports after the customs department gave its approval to some lots.

Imports had virtually stopped after the so-called 80/20 principle, which tied exports with domestic consumption, creating confusion among government officials, and prompting the commerce ministry to call a meeting to break the deadlock. Overseas, gold held onto sharp overnight gains in Asian trading on Thursday as weak US economic data and a partial government shutdown raised hopes that the Federal Reserve would stick to its bullion-friendly stimulus for longer. The rupee rose 1 percent on Thursday. A strong rupee makes gold imports cheaper. Indian markets were closed on Wednesday for a national holiday. Courtesy: Reuters

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