Gold demand in India was robust on Wednesday,but limited supplies were forcing jewellers to pay near-record premium. The actively traded gold price for February delivery on the Multi Commodity Exchange (MCX) was up 0.12 percent at 29,096 rupees per 10 grams at 0945 GMT.
The Indian rupee plays an important role in determining the landed cost of the US dollar-quoted yellow metal. The Indian rupee edged up on Wednesday.
Overseas,gold hit a new five-month low on Wednesday as investors awaited more US economic data due later this week to gauge the outlook for the Federal Reserve’s bond purchases that have boosted bullion’s appeal as a hedge against inflation.
Silver for March delivery on the MCX was 0.56 percent lower at 43,890 rupees per kg.
To ease trade deficit,India,which is the world’s biggest consumer of bullion,has made bringing in gold more expensive,the biggest non-essential import item. The government has set the import duty at a record high 10 percent.
“No one is giving us stocks,all of it is going to exporters,” said Harshad Ajmera,proprietor with JJ Gold House in Kolkata. He added that premiums were quoted at more than $130 an ounce.
The federal government has tied the quantity of imports to exports,making it necessary for importing agencies to fulfil export orders before sending any bullion for local consumption.