Indian gold edged lower on Monday,weighed by a stronger rupee while traders are still waiting for more declines as they gear up to build stocks for the upcoming wedding season.
The actively traded gold for June delivery on the Multi Commodity Exchange (MCX) was 137 rupees lower at 29,630 rupees per 10 grams at 0851 GMT.
The rupee,which traded stronger,plays an important role in determining the landed cost of the dollar-quoted yellow metal.
“A few deals are there since morning as prices are out of comfort level. We have seen need-based activity rather than building up on inventory,looking at the price levels,” said a dealer with private bullion importing bank.
Weddings will start now in India,the world’s biggest buyer of gold,and continue till early June. Festivals will also take place during this period.
India has been trying to curb imports to put a lid on the record-high current account deficit. The federal government raised the import duty on gold,which it called a dead investment,by 50 percent to 6 percent in January.
India’s Finance Minister P. Chidambaram suggested last week the government was unlikely to raise the import tax on gold further to avoid gold smuggling.
May silver was 0.50 percent lower at 51,309 rupees per kg.