04:37
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Indian households looking to buy gold for the wedding season are unlikely to benefit from the yellow metal’s bearish trend in the international market due to falling rupee.
International gold prices fell 1.6% to $1,175 an ounce on Friday, but in the domestic commodity bourse MCX, gold declined only 0.7% to Rs 26,701 (less 1% VAT) per 10 gm. That is because India imports most of the gold it consumes and hence, currency fluctuations impact domestic gold prices.
The rupee closed at over a three-month low of 63.56 a dollar on Friday, down from Thursday’s close of 63.32. Also, market players expect the local currency to fall further as reflected in currency options data on the National Stock Exchange, further queering the pitch for gold buyers.
While international gold prices could test the $1,150-support next week when US Fed officials meet to consider, among others, the timing of an interest rate hike this year – negative for gold – any fall in prices could be offset by a weakening rupee.
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Posted in: Indian Market Tips
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