Commodity Online
NEW DELHI : Gold futures rose by 0.39 percent on the Multi Commodity Exchange Wednesday in line with global trends despite a strong rupee and waning demand.
Gold in the most active August contract rose by 0.39 percent to Rs 14,674 rupees per 10 grams at 3.15 p.m while the metal for delivery in October was at Rs 14,680 per ten grams at the same time.
Nonetheless soft physical demand for the precious metal could threaten the rise as demand in India, world’s largest gold consumer, slowed as the wedding season there is nearing its end.
Silver futures also rose by 0.85 per cent on the Multi Commodity Exchange Wednesday on pick up in demand in the spot market.
Analysts however said a strong rupee, which makes the dollar-quoted asset cheaper, kept a lid on gains.
The Indian rupee rose for a second straight day as hopes for financial reforms in the budget in early July raised expectations foreigners would continue to bring in more capital.
Meanwhile India's gold collections under the exchange traded funds (ETFs) edged up 9.3 percent on year to about 4.99 tones in May from 4.57 tones a year ago.
The Gold Benchmark Exchange Traded Scheme on National Stock Exchange (NSE) traded 0.94 percent higher at 1,456.00 rupees per gram at 3.15 p.m..
Though gold collections under the ETFs are growing on year, they remain miniscule against India's imports of around 400-800 tones annually.
The gold ETFs, instruments that trade like shares and are backed by physical gold holdings, are more than two years old and may get crowded with some other funds planning their entry.
On the global arena, gold prices rose above $960 in European trade Wednesday as fresh dollar weakness prompted buying of the precious metal as a currency hedge and as oil prices rose to a new seven-month high.
Spot gold was seen trading at $961.40 an ounce at 3.15 p.m India time as against $953.75 an ounce late in New York on Tuesday.
The dollar slipped against a basket of currencies on Wednesday, extending the previous session's losses, as investors questioned whether the US economy was sufficiently recovered to justify talk of a Federal Reserve rate hike.
Silver, platinum and palladium all tracked gold up, with dollar-priced commodities benefiting from the US unit's slip, which makes them cheaper for holders of other currencies.
