Gold demand sluggish as jewellers postpone buys

Tags: Commodities

Players expecting a sharp decline in prices, stay on the sidelines

MUMBAI: Gold demand in India, the world’s biggest buyer of the metal, remained sluggish on Monday as buyers postponed purchases expecting a sharp drop in prices.

As of 10:52 GMT, the most active gold contract for April delivery on the Multi Commodity Exchange (MCX) was 0.01 per cent lower at Rs 30,190 per 10 gm.

Demand is weak from local jewellers. Investment demand is also weak. Jewellery exporters are buying, but they are also cautious, said a Mumbai-based dealer with a state-run bank.

Most jewellers are on the sidelines. They are expecting a sharp drop in prices.

The rupee plays an important role in determining the landed cost of the dollar-quoted yellow metal. It fell on Monday.

After a 50 per cent increase in import duty to 6 per cent on January 21, the Reserve Bank of India (RBI) recommended putting curbs on imports, along with launching gold-linked products to limit shipments.

The government may further raise import duties on gold or put a cap on purchases in a bid to rein in the current account deficit in the 2013-14 budget, an official with the biggest state-run gold importer MMTC said on Monday.

The silver contract for March delivery on the MCX was 0.25 per cent higher at Rs 56,204 per kg.

The following were the prices of gold and silver in rupees as of 1.15 pm local time in the spot market, quoted by HDFC Bank.

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