India gold buying marginally up on strong rupee
today Jun 21, 2010
India gold buying picked up slightly on Monday afternoon as a strong rupee made the dollar-denominated yellow metal cheaper, dealers said.
"There is buying going around below $1,260 and at current levels," said a dealer with a state-run bullion dealing bank in Mumbai.
The most-active August contract was trading 0.50 percent lower at 18,754 rupees per 10 grams at 2:17 p.m., after hitting a low of 18,600 rupees, but well below the all-time high of 19,198 rupees struck on June 8.
The rupee strengthened to its highest level in more than a month on Monday, boosted by hopes China will allow gradual appreciation of the yuan while the dollar's losses against major currencies also helped.
The rupee plays a pivotal role in determining the landed cost of the yellow metal, which is quoted in dollars.
"Rupee is in supporting mode, that's why these deals," said another dealer with a private bullion dealing bank.
The onset of monsoon typically crimps gold demand in India as rural households, which account for 65 percent of total gold buying, slows as farmers use funds to buy seeds and fertiliser.
Gold imports into India may fall to less than 15 tonnes from 29.9 tonnes a year earlier as near-record prices and the onset of monsoon dent demand, a trade body official said.
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