Monday 27 May 2013

Gold edges higher on global cues; demand subdued

Indian gold futures edged higher on Monday tracking gains in the overseas market, while demand in local spot markets remained subdued as prices were hovering above 26,000 rupees per 10 grams.

The actively traded gold for June delivery on the Multi Commodity Exchange (MCX) was 0.07 percent higher at 26,424 rupees per 10 grams.

Jewellers are not active. Retail demand is weak. The wedding season is coming to an end. There is no major festival in the next two months," said a Mumbai-based dealer with a private bullion importing bank.

"Gold supplies are comfortable in the local market. There is no shortage like we saw earlier this month, but buyers are not comfortable with making purchases above 26,000 rupees," the dealer said.

The Reserve Bank of India restricted banks from consignment imports of gold, except for jewellery exporters, after imports jumped more than 150 percent in April, despite a 50 percent hike in import duty in January.

The rupee, which is trading near its lowest level in more than eight months, plays an important role in determining the landed cost of the dollar-quoted yellow metal.

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