Gold offtake slows as consumers expect price correction despite global uptrend

MUMBAI: Gold offtake on commodity bourse MCX has slowed considerably. Ketan Shroff, MD of Mumbai-based bullion dealer Penta Gold, said consumers expect prices to correct to Rs 25,000 per 10 grams from the current levels of Rs 26,600.



There is a belief that gold will correct to Rs 25,000, so offtake by retail consumers has really slowed," said Shroff. "It's likely that the international rate, currently below $1200 an ounce (32 grams), would rise to around $1220, but the overall trend is bearish," he added.

Gold was trading at Rs 26,639 per 10 grams on the MCX mid-day on Wednesday, 20 basis points higher than the previous close.

Options pricing data of the US-based CME group, however, indicates a likely breach of the $1,200 an ounce level over the short to medium term, which could raise domestic gold rates to above Rs 27,000 per 10 gm.