Gold hits 1-wk high imports down in peak season

Indian gold extended gains for a fourth session to revisit its highest level in nearly a week, with most importers refraining from deals in the middle of the wedding season, eyeing the US Federal Reserve meeting starting Tuesday.

The wedding season, which started in September and peaked last month, continues until early January. Gold is an essential gift item during this season in the country, the world’s biggest consumer of the metal.

“Just need-based covering is going on in the physical market... market is waiting for FOMC (Federal Open Market Committee) outcome for direction,” said a dealer with a private bullion importing bank in Mumbai.

The actively-traded gold for February delivery on the Multi Commodity Exchange (MCX) was 0.17 per cent higher at Rs 31,378 per 10 grammes, after hitting a high of Rs 31,408, the highest since December 5, following similar leads in global markets.

Investors are also watching the progress in the US fiscal talks and potential political uproar in Italy, which could jolt the market where liquidity is starting to thin as traders close books before the end of the year.

The US Federal Reserve policy meeting is scheduled on Tuesday and Wednesday.

The rupee, which traded stronger, kept the rise in prices limited. The local currency plays an important role in determining the landed cost of the dollar-quoted yellow metal.

Silver for March delivery on the MCX was 0.57 percent higher at 62,938 rupees per kg, after hitting a crest at 62,975 rupees, a level not seen after Nov. 30.

The following were the prices of gold and silver in rupees at 1:15 p.m. in the spot market, quoted by HDFC Bank :