Gold nears record high, dampens wedding sales

NEW DELHI: India's physical gold sales declined on Wednesday as prices neared new record highs with euro zone fears drawing safe-haven investment overseas but damping wedding season purchases in the local market, the world's biggest for the metal.

India's front-month gold futures on the Multi Commodity Exchange of India Ltd quoted at 20,487 rupees per 10 grams at 1747 hours, after touching a high of 20,557 rupees intraday, close to the all-time high at 20,569 rupees struck on Nov. 9.

"Demand is absolutely dull so far. The appetite is not strong, only need-based buying is there," said a precious metals dealer in a bank in Mumbai.

India's gold market is still in the midst of its busy season after the Dhanteras and Diwali festivals earlier this month as many weddings are to take place till December, spurring at least some demand for the metal that plays an important role in social functions.

A large gold trader in Mumbai's Zaveri Bazar, the hub of gold business, said several profit-takers were in the market, selling their trinkets or bars of gold, finding the current levels attractive.

"We are getting a lot of scrap," said Anish Jitendra Jain of Jugraj Kantilal & Co, which collects scrap gold, melts it, and refines it for selling back in bar forms in the market.

"We are expecting to buy 2-3 kgs today." Jain said further highs at the levels of 21,500-22,000 rupees could attract heavy profit taking, in what could boost local supplies and shrink imports of the metal.

Following are prices quoted by Scotia bank in rupees in the spot market at 1615 hours.