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Last Updated : Apr 16, 2013 04:47 PM IST | Source: Reuters

Gold up from 18-month low; sales below expectations

Indian gold futures bounced from their lowest level in more than 18 months on Tuesday mirroring global markets, with physical traders witnessing a small revival in demand, but below expectations.


Indian gold futures bounced from their lowest level in more than 18 months on Tuesday mirroring global markets, with physical traders witnessing a small revival in demand, but below expectations.


A stronger rupee kept the upside in prices limited. The rupee plays an important role in determining the landed cost of the dollar-quoted yellow metal.


The actively traded gold for June delivery was 0.8 percent higher at Rs 25,842 per 10 gram on the Multi Commodity Exchange at 3.51 pm, recovering from a low of Rs 25,270 struck earlier in the session, a level last seen in late September 2011.


"Sales are not on the expected lines. Traders feel the current rally is a consolidation phase and market will come down," said a dealer with a bullion importing bank in Mumbai, adding premiums have increased by 10-20 cents to $1.8 an ounce on London prices.


In the overseas market, gold rose 1 percent after a drop to a two-year low earlier in the session ignited physical buying, but investors frustrated by the metal's lacklustre performance remained cautious amid fears of central bank sales and global growth.


"We might see good sales for Akshaya Tritiya, as sentiment is still nervous," said Prithviraj Kothari, director with Mumbai-based wholesaler RSBL Bullions, adding there could be short-covering to $1,410 (an ounce) after price decline.


India, the world's biggest buyer of the yellow metal, will celebrate Akshaya Tritiya, a key gold buying festival, next month. The wedding season has also begun and will continue till early June.

May silver, however, was 0.52 percent lower at Rs 44,149 per kilogram.



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First Published on Apr 16, 2013 04:45 pm
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