India gold demand rises as rupee strengthens

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India gold traders were buying the metal on Monday afternoon to take advantage of a slight dip in domestic prices on account of a stronger rupee, as they prepared for the wedding season, which starts in April, dealers said.

"Good demand was there at USD 1,135-1,137 (an ounce) as the rupee is acting in favour. We did about 50-70 kgs since morning," said a dealer with a state-run bank in Mumbai.

The Indian rupee was trading close to near two month highs as strong domestic shares and a sharp fall in the dollar versus major currencies supported sentiment. A strong rupee makes the dollar-quoted asset cheaper.

International gold, which guides the domestic markets, was trading at USD 1,137.10/1,137.90 an ounce as against the previous close of 1,133.80/1,135.80.

"I have plenty of deals below USD 1,120 an ounce," said Pinakin Vyas, chief manager-treasury, IndusInd Bank.

Gold prices firmed in Europe as the euro rose versus the dollar after better than expected U.S. jobs data on Friday lifted appetite for higher-yielding currencies.