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Last Updated : Jun 22, 2012 03:14 PM IST | Source: Reuters

Record rupee weakness triggers recovery in gold

Gold recovered from its lowest level in over a week after the rupee touched a new low on Friday, driving away physical traders on a day the government retained its normal monsoon forecast, vital to rural demand.


Gold recovered from its lowest level in over a week after the rupee touched a new low on Friday, driving away physical traders on a day the government retained its normal monsoon forecast, vital to rural demand.


* At 0850 GMT, the most-traded gold contract was trading at Rs 29,965 per 10 grams, up from the previous session's low of Rs 29,815.


* "Activity is still dull despite yesterday's fall because of the constant fall in the rupee," said a dealer with a private bank in Mumbai.


* The rupee weakened beyond the psychologically important 57-per-dollar mark on Friday, hitting a record low for a second consecutive session.


* The rupee plays an important role in determining the landed cost of the dollar-quoted yellow metal.


* India's monsoon rains are still expected to be average in 2012, allaying concerns over farm output triggered by sparse rainfall in the last few weeks.


* Rural areas, which contribute to over 60 percent of gold demand, are dependent on monsoon rains to spur agricultural production and disposable incomes.


* The onset of the rains curtail festive and wedding activity.


* Silver followed a similar trend.


* Silver for July on the MCX was 0.28% higher at Rs 53,045 per kg.



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First Published on Jun 22, 2012 03:12 pm
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