Physical Gold buying may help gold edge up
Indian imports, affected by a July 22 RBI notification stipulating that
at least 20 per cent of the yellow metal brought into the country should
be re-exported, are likely to resume anytime now.
Gold prices on the domestic spot and futures market are likely to look
up a little on hopes that buying in China and India may increase.
However, uncertainty over the US Federal Reserve’s move on the
$85-billion-a-month stimulus package is proving to be a market dampener.
Indian imports, affected by a July 22 RBI notification stipulating that
at least 20 per cent of the yellow metal brought into the country should
be re-exported, are likely to resume anytime now. With kharif harvest
beginning and festivals ahead, rural consumers could begin buying gold.
On the other hand, buying in China is seen up ahead of holidays starting
October 1. Gold purchases in Shanghai exchange increased on Monday.
But holdings of gold in electronic form in exchange-traded funds
dropped. On Monday, SPDR Trust, world’s largest gold exchange traded
fund, reported that its holdings dropped below 910 tonnes to 909.59
tonnes.
Data on Germany business climate, US Consumer confidence, US chain store
sales and housing index could have some influence on the precious
metals market later in the day. In India, any rise in the rupee’s value
against the dollar will make imports of gold, crude oil and vegetable
oils cheaper.
Spot gold, gold futures
In early Asian trade, spot gold rose to $1,326.63 an ounce and gold futures maturing in December at $1,326.60.
In Mumbai bullion market, gold for jewellery (99.5% purity) dropped to Rs 29,790 and pure gold (99.9% purity) to Rs 29,935.
On MCX, gold October contracts could try to scale back to Rs 30,000.
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