Indian gold traders pick bargains fearing price rise

Apr 22 2013, 16:34 IST
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Gold in overseas market jumped more than 2 percent after a rebound above $1,400. (Reuters) Gold in overseas market jumped more than 2 percent after a rebound above $1,400. (Reuters)
SummaryGold in overseas market jumped more than 2 percent after a rebound above $1,400.

Gold traders in India, the world's biggest buyer of the metal, continued to pick up bargains for a second consecutive week fearing further price rise, after prices rose nearly 1 percent from the lowest level in more than 18 months. An 11 per cent lump in gold prices since last week released years of pent-up demand, resulting in a supply shortage in the physical market, triggering higher premiums.

"There are a lot of deals as people are comfortable at these levels. All are saying prices may go up any time," said a dealer with a state-run bullion importing bank.

However, the federal government has been trying to keep a lid on bulging imports to counter the record high current account deficit.

The actively traded gold for June delivery on the Multi Commodity Exchange (MCX) was 249 rupees higher at 26,296 rupees per 10 grams at 0849 GMT, after hitting a low of 25,270 rupees, a level last seen in September 2011.

The rupee, which weakened on Monday, plays an important role in determining the landed cost of the dollar-quoted yellow metal.

Gold in the overseas market jumped more than 2 percent after a rebound above $1,400 ignited technical buying, but sentiment was shaky as steady outflows from exchange-traded funds trimmed their bullion holdings to the lowest in three year.

May silver on the MCX was 215 rupees higher at 43,638 rupees per kg.

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