Gold demand weak, prices near 2-month high

Indian gold traders stayed on the sidelines as prices hovered near their highest level in two months due to firm overseas markets and a weaker rupee.

* The most-active gold for June delivery on the Multi Commodity Exchange (MCX) was 0.24 percent higher at 28,908 rupees per 10 grams, after hitting a near two-month high of 28,925 rupees.

[caption id=“attachment_289673” align=“alignleft” width=“380” caption=“Indian gold traders stayed on the sidelines as prices hovered near their highest level in two months due to firm overseas markets and a weaker rupee. AFP”]  [/caption]

* “It (gold sales) has been quite low since last one month, and continuing even after Akshaya Tritiya,” said a dealer with a private bullion importing bank in Mumbai.

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* Sales on Tuesday for Akshaya Tritiya, the second biggest gold buying festival after Dhanteras, are estimated to have halved to 10 tonnes this year on high prices and as inflation crimped savings.

* The rupee, which weakened on Thursday, plays an important role in determining the landed cost of the dollar-quoted yellow metal. A weaker rupee makes the yellow metal expensive.

* Overseas gold edged up on gains in equities and expectations the U.S. Federal Reserve could do more if necessary to lift the economy.

Reuters