Gold gyrates in tight range; traders seek price direction

 

  Gold in India, the world's biggest buyer of the metal, remained steady in familiar ranges as traders, who want to re-stock for festivals and weddings, kept to the sidelines seeking price direction.

 

* The most-active gold for June delivery on the Multi Commodity Exchange (MCX) was 11 rupees lower at 29,578 rupees per 10 grams at 2:56 p.m., after moving in the tight range of 29,132-29,816 rupees in the previous five sessions.

 

* U.S. gold for June delivery was steady at $1,587.00 an ounce as stronger equities lured buyers seeking better returns.

 

* A stronger rupee also weighed on the yellow metal. The rupee plays an important role in determining the landed cost of the dollar-quoted yellow metal.

 

* "Right now, there are no sales, but expectations are good ahead of festivals," said Harshad Ajmera, proprietor of JJ Gold House in eastern Indian city of Kolkata.

 

* The wedding season has begun in India and will continue till early June. Festivals including Akshay Tritiya, the second biggest gold buying festival after Dhanteras, will also take place during this period.

 

* India has been trying to curb imports to put a lid on the record-high current account deficit. The federal government raised the import duty on gold, which it called a dead investment, by 50 % to 6 % in January.

 

* India's Finance Minister P. Chidambaram suggested last week the government was unlikely to raise the import tax on gold further to avoid gold smuggling.

 

* Silver for May delivery on the MCX was 19 rupees lower at 52,144 rupees per kg.