MUMBAI (Reuters) – Gold demand in India, the world’s biggest buyer of the metal, was moderate on Friday as jewellers replenished inventory for festivals and the wedding season, but retail and investment demand remained sluggish.
The actively traded gold contract for February delivery on the Multi Commodity Exchange (MCX) was 0.32 percent lower at 30,725 rupees per 10 grams as of 5:48 p.m.
“A stronger rupee is capping the upside in gold prices. Jewellers are buying. They think it’s a good time to buy, but retail demand is weak. People are in holiday mood due to year-end,” said a Mumbai-based dealer with a state-run bank.
Demand in Tamil Nadu remained strong as people in the state will celebrate Pongal in mid-January.
The rupee, which rose on Friday, plays an important role in determining the landed cost of the dollar-quoted yellow metal.
Overseas gold gave up early gains and ticked down ahead of talks to prevent the United States from plunging off a “fiscal cliff” of tax increases and spending cuts, but prices remained on track for their first weekly gain in a month.
The March silver contract on the MCX dropped 0.60 percent to 57,824 rupees per kg.
(Reporting by Rajendra Jadhav; Editing by Subhranshu Sahu)