Gold prices near two-week high; premiums down

 

Gold traders in India refrained from placing new orders as prices steadied near their two-week high, and premiums also came off from their highest level in more than 2 years with supplies rising.

 

The price fall to its lowest level in more than 18 months had triggered a buying frenzy among consumers in India, the world's biggest buyer of the metal, but interest has subsided on partial recovery in prices.

 

"Retail sales are already down since yesterday due to the price rise," said Daman Prakash Rathod, director with Chennai-based wholesaler MNC Bullion.

 

Premiums charged on London prices were at $2-4 an ounce as against 2010-level of $10 seen earlier in the week.

 

"Scarcity and shortage have disappeared as imports that were contracted last week started coming in," said a dealer with a private bank in Mumbai.

 

India, the biggest buyer of gold, has been trying to limit imports to keep a lid on record current account deficit, and the economic advisory council expects the country to import $45 billion tonnes of the yellow metal in the year to March 2014.

 

The most-active gold for June delivery on the Multi Commodity Exchange was 0.14 % higher at 27,080 rupees per 10 grams at 3.46 p.m., after hitting a high of 27,264 rupees earlier, helped by a weaker rupee.

 

The rupee plays an important role in determining the landed cost of the dollar-quoted yellow metal.

 

Silver for May delivery on the MCX was down 0.25 % at 45,057 rupees per kilogram at 3.50 p.m.