Bleak global outlook aids gold's record run

MUMBAI/LONDON: Gold demand in India, the world's biggest buyer, was moderate on Monday after the prices in the local market rose 2% to a record high tracking firmness in global markets and due to a weak rupee, dealers said.

At 3:57 pm, the October contract on the Multi Commodity Exchange was up 1.74% at Rs 28,273 per 10 grams, after hitting a record high of Rs 28,355 earlier in the day. The contract has risen over 20% since the beginning of August.

"Demand was normal. People were buying despite the record high prices," said TK Chandiran, managing director with Coimbatore-based KTM Jewellery. "Though most people are buying jewellery, sales of coins and bars have also risen."

Wedding and festival season demand will gain pace and peak in October before tapering off in December. "Festival demand is going to slow down if prices remained above Rs 28,000," Chandiran said.

The rupee stayed weak in afternoon trades on Monday as the dollar gained overseas with investors seeking safe-haven assets after bleak jobs data on Friday cemented view the United States might be slipping back into recession. The rupee plays an important role in determining the landed cost of the yellow metal, which is quoted in dollars.

Continue reading