Gold demand ticks up on fall in global rates

MUMBAI: Demand for gold picked up in the country in the past week as rates in the international market fell below the psychological level of $1,300 an ounce and the rupee strengthened against the dollar.

On Monday, the metal fell about $27, or 2%, an ounce (32 gm) over Friday’s close and was trading at $1,278.05 at intra-day.

The domestic gold takes price cues from overseas markets as India imports most of the 800 tonne of the metal it consumes annually.

The near month gold futures, which more or less mimic the spot rate excluding 1% VAT, fell almost 3% to Rs 27,770 on MCX in the late noon trades on Monday. A sharper fall was visible on MCX because the rupee has gained 26 paise since August 15.

Harshad Ajmera of Kolkata-based JJ Gold House said he expects the rate to consolidate around the current levels.

Jewellers are hoping that demand will rise in the second quarter to coincide with the onset of several festivals.

Gold consumption has fallen in the first half of this year, data from the World Gold Council shows. In the six months to June, demand fell 34% year-on-year to 394.4 tonne.