Thursday, January 20, 2011

Indian Physical Gold Buying Stays Dormant Due To Weak Rupee

According to a Reuters report webbed by the Economic Times, gold purchases by traders is being held back by the rupee:
"There are a few deals, but traders are not getting benefit due to a weaker rupee," said a dealer with a private bullion importing bank in Mumbai....

"Premiums are still on the side, they want $1.5 (an ounce)," said another dealer with the state-run bank in Mumbai.

The winter harvesting season is underway in India and is expected to leave more disposable income with rural households, which contribute significantly to gold demand.
That reluctance may change with gold tumbling below $1,350.

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