Price falls not enough for traders seeking to stock up for upcoming festival season
Indian gold futures eased from their highest level in a month, weighed by a stronger rupee, but price falls were not enough for traders seeking to stock up for the upcoming festival season.
* The most-active gold for October delivery on the Multi Commodity Exchange (MCX) was 0.27 percent lower at 30,116 rupees per 10 grams at 0932 GMT, easing from the previous day's high of 30,325 rupees, its highest level since June 28.
* The rupee, which traded stronger, plays an important role in determining the landed cost of the dollar-quoted yellow metal.
* "Demand is still poor... wholesalers are selling gold at a discount," said Mayank Khemka, managing director, Khemka Group of Companies. "I doubt whether demand will pick up and could pick up only if prices fall to 28,000 rupees."
* Physical demand has been subdued so far this year and is expected to remain dull.
* The festival season starts in August in India, the world's biggest gold buyer in 2011, and continues till November.
* Traders are also eyeing the monsoon forecast for the second half of the June-September season, which is vital to gold demand in rural areas.
* Monsoon rains, which have been below normal so far, are vital to the farm economy in rural areas, which account for 60 percent of gold demand.
Silver prices drifted by Rs 191 to Rs 58,782 per kg in futures trade today as speculators offloaded their positions, tracking a weak global trend.