Indian gold futures fall on global cues

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Indian gold futures dropped tracking global prices, which fell on expectations that an improvement in the U.S. economy would lower demand for the yellow metal. Reuters Indian gold futures dropped tracking global prices, which fell on expectations that an improvement in the U.S. economy would lower demand for the yellow metal. Reuters
SummaryIndian gold imports may fall 70 percent in the final quarter of 2013.

Indian gold futures dropped on Monday tracking global prices, which fell on expectations that an improvement in the U.S. economy would lower demand for the yellow metal.

At 1018 GMT, the most-active gold for February delivery was down 0.47 percent at 28,426 rupees per 10 grams on the Multi Commodity Exchange.

Silver for March delivery was down 1.59 percent at 44,432 rupees per kg.

International gold edged lower, heading for its biggest annual loss in more than three decades at nearly 30 percent, as firm equities and the prospect of a recovery in the global economy stole its shine.

The partially convertible rupee, which plays a key role in determining the landed cost of the dollar-quoted metal, edged lower as a large state-run bank likely bought dollars on behalf of oil refiners.

"Gold-exchange traded fund outflows also indicate weaker investor interest," Kotak Commodity Services analysts wrote in a note. "However, choppiness in the U.S. dollar has lent some support. Gold may continue to trade weaker on Monday on optimism about the U.S. economy."

Indian gold imports may fall 70 percent in the final quarter of 2013 from 255 tonnes in the year-ago period and are expected to be half the usual levels at 500-550 tonnes next year if new import rules are maintained, a top trade body official said.

To curb a rising trade gap, the Indian government slapped a record import duty of 10 percent earlier this year and tied imports for domestic consumption with exports.

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