Gold buyers expect fall in prices
Mumbai, July 9: India gold buyers trickled in on Friday as traders anticipated a further fall in prices to stock for an upcoming festival season, even as a strong rupee acted in support, dealers said.
“There are deals but the deal size has shrunk. Earlier it was 5-7 kgs, now it is 1-2 kgs,” said a dealer with a state-run bullion dealing bank in Mumbai.
International gold was trading at $1,197.15/1,198.15 an ounce at 2:14 pm as against the previous close of $1,196.45/1,200.48 an ounce, recovering from a six-week low of $1,185.05 hit on Wednesday.
Prices are still below the record high of $1,264.90 struck on June 21.
“I have bulk of my orders at $1,184-1,185 (an ounce), very few are placed above $1,190,” said another dealer with a private bank.
The Indian rupee continued to trade stronger, tracking gains in domestic shares and the dollar’s losses against major currencies overseas, especially the euro.
A strong rupee makes the dollar-denominated asset cheaper. Traders have been stocking the yellow metal for the upcoming festivals, when demand for bullion goes up.
Analysts said a weakening trend in international markets, which set the price trend in domestic markets, mainly weighed on the trading sentiment. Reduced offtake at existing higher levels was another dampening factor, they said.
India, which accounts for about 20 per cent of global demand, will celebrate Raksha Bandhan in August, and Ganesh Chaturthi in September.
Comments
There seems to be weakening
Leonard Rosen
10 Jul 2010 - 08:16
There seems to be weakening in the gold market, but hard money lending is still on the upswing.
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