Gold futures in India edged higher on Tuesday,the world’s biggest buyer of the metal,recovering partly from their last week’s lowest level in eight months,driving away importers amid liquidity crunch ahead of the financial year-end.
India has been trying to curb imports of gold,which has been called a dead investment by the federal government,to put a lid on record high current account deficit by hiking import duty by 50 percent to 6 percent in January.
At 0640 GMT,the actively traded gold contract for April delivery on the Multi Commodity Exchange (MCX) was 0.18 percent higher at 29,373 rupees ($540) per 10 grams,helped by gains in overseas markets. The contract hit a low of 29,111 rupees last week,a level last seen on July 20.
The rupee,which traded stronger,limited the upside. The rupee plays an important role in determining the landed cost of the dollar-quoted yellow metal.
Overseas gold inched up on physical buying in Asia,but it struggled to break above a recent range as improved economic outlook and a stock market rally capped sentiment for the precious metal.
“There is no demand due to financial year closing… there could be some demand in April,” said Haresh Acharya,head of bullion desk,Parker Bullion,a wholesaler in Ahmedabad.
Weddings and festival season will restart next month and continue until early June.
Silver contract for May delivery on the MCX was 0.15 percent higher at 54,677 rupees per kg.
The following were the prices of gold and silver in rupees as of 10.15 a.m. local time in the spot market,quoted by HDFC Bank :