Moneycontrol
Apr 12, 2013 04:59 PM IST | Source: Reuters

Gold prices set for 2% fall this week

Gold futures in India, the world's biggest buyer of the metal, hovered around their lowest level in a week, though prices were on track for a 2-percent fall this week.


Gold futures in India, the world's biggest buyer of the metal, hovered around their lowest level in a week, though prices were on track for a 2-percent fall this week.


* At 2:49 p.m., the actively traded gold for June delivery on the Multi Commodity Exchange (MCX) was down 161 rupees at 29,022 rupees per 10 grams.


* It had touched a low of 29,055 rupees in the previous session, a level last seen on April 5.


* In the overseas market, gold prices were also steady, but on track for their worst week since late February as strong equities lured investors seeking better returns, while outflows from exchange-traded funds underlined the shaky outlook for bullion.


* A stronger rupee weighed on sentiment. The rupee plays an important role in determining the landed cost of the dollar-quoted yellow metal.


* "Market is slow. Buyers are still waiting for 29,000 rupees levels," said Haresh Acharya, head of bullion desk at Ahmedabad-based Parker Bullion.


* The wedding season has begun in India and will continue till early June. Akshay Tritiya, the second biggest gold buying festival after Dhanteras, also falls in 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.


* On April 2, Finance Minister P. Chidambaram suggested the government was unlikely to raise the import tax on gold further to avoid gold smuggling.

* Silver for May delivery on the MCX was 0.29 percent lower at 51,525 rupees per kilogram.

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