Indian gold futures hit 1-week high

Written by Reuters | Mumbai | Updated: Nov 26 2013, 22:10pm hrs
Gold prices in India hit their highest level in a week on Tuesday, recovering from the previous session's lowest level in more than two weeks in line with overseas markets, with jewellers struggling to meet wedding demand in the peak season.

* At 1045 GMT, the most-active gold for December delivery on the Multi Commodity Exchange (MCX) was 0.39 percent up at 30,288 rupees per 10 grams, after hitting a high of 30,444 rupees, a level last seen on Nov. 20.

* The contract had struck a low of 29,615 rupees in the previous session, a level last seen on Nov. 8.

* International gold was trading near a one-week high, buoyed by short-covering gains in the previous session.

* In the domestic market, premiums stayed near a record of $125 an ounce on London prices due to limited supplies amid rising demand.

* "We call at least 10-15 suppliers, but still don't get supplies... this is our condition despite paying high premiums. People are forced to sell smuggled gold," said Harshad Ajmera, proprietor of JJ Gold House, a wholesaler in Kolkata.

* Sales have dropped to 5 kgs now per day from 10-15 kgs last year, Ajmera added.

* To ease its trade deficit, India has made it more expensive to bring in gold, the biggest non-essential import item, by setting the import duty at a record high 10 percent.

* It has also tied the quantity of imports to exports, making it necessary for importing agencies to fulfil export orders before sending any bullion for local consumption.

* The World Gold Council (WGC) cut its forecast for Indian gold demand earlier this month, predicting that the country could also lose its crown as the world's biggest consumer of bullion to China.