Gold buying continues as prices hit 3-month low

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India's gold buying continued on Friday afternoon, with limited quantities changing hands as prices hit a fresh three-month low, dealers said. Demand is still coming in but not in big lots as it did yesterday. We must have sold 300-400 kg yesterday and most of the orders got triggered at USD 1,060-1,075 (an ounce)," said a dealer with a state-run bank in Mumbai.

Demand has slowly picked up from late Thursday evening, dealers said. International gold was trading at USD 1,054.70-1,055.70 an ounce, after hitting an intra-day low of USD 1,050.50, the lowest level since November 2. "I have orders in lots of 10 kg and 40 kg in between USD 1,045-1,050 (an ounce)," said another dealer with a private bank.

However, a weaker rupee, which makes the dollar-quoted asset expensive, weighed on sentiment, dealers added. The rupee weakened on the back of a strong dollar overseas and losses in domestic equities market.

India has imported 35-40 tonne of gold during January 1-27, up from 9.8 tonne in the whole of the same month last year, the head of a trade body and bank dealers said.