Gold edges higher, physical demand still weak
Overseas gold hovered near $1,580 per ounce as investors clung to hopes for more monetary easing from the US
Indian gold edged higher on Friday, helped by global markets and a weaker rupee, with physical traders eager to book deals ahead of the festivals months.
At 2:43 pm, the most-active gold for August delivery on the Multi Commodity Exchange (MCX) was 0.26% up at 29,234 rupees per 10 grams.
Overseas gold hovered near $1,580 per ounce as investors clung to hopes for more monetary easing from the U.S. central bank after weak data in the previous session.
The rupee, which weakened on Friday, plays an important role in determining the landed cost of the dollar-quoted yellow metal.
Gold imports into India have already witnessed a more than 50% drop, and continue to fall in coming quarters.
"Demand has slowed down again... there could be offtake if prices fall to 28,800 rupees," said Ketan Shroff, director with Pushpak Bullion, a wholesaler in Mumbai.
A below-average monsoon could impact farm income. Most of the country's gold imports happen through rural areas.
India's gold imports fell by over half in the June quarter and could slide by a third over the next three months as prices inflated by a weak rupee and a 4% import duty encourage traders to use scrap, a Reuters poll showed.
Silver traded flat. Silver for September delivery on the MCX was 0.01% higher at Rs 52,676 per kg.