Indian Gold Traders Stock for Festivals on Strong Rupee
Source: Yahoo News, Siddesh Mayenkar (10/7/10)
"Gold traders booked deals on Thursday despite record-high prices."
"All my phones are buzzing, they are rushing in to buy gold, trying to catch rupee at 44.16/44.17 (per dollar)," said a dealer with a state-run bullion dealing bank in Mumbai.
The rupee's rise has been attributed to inflows related to a qualified institutional placement by a large automobile company.
The most-traded December gold contract on the Multi Commodity Exchange hit a new high of 19,664 rupees per 10 grams in early trades, extending its record-breaking rally to the third day in a row.
The strong rupee, however, kept a lid on gains, triggering domestic buying.
The period of Shradh, an inauspicious time to buy gold, ended on Wednesday, and Thursday marks the re-start of festivals such as Mahalaya in West Bengal.
Festival demand will peak on Dhanteras slated in November, when jewelers register the highest sales every year. Weddings also take place during the festival season.
This has prompted MMTC Ltd., the country's second-largest gold importer, to increase December quarter imports by 37 percent to 55-60 tons.