Gold demand drops as price rally continues

If you missed our coverage, here are the top 10 stories of the day.

Former Olympus president and chief executive Michael Woodford.
Former Olympus president and chief executive Michael Woodford.

Demand for gold in India, one of the world's top consumers, remained subdued on Monday as local prices rose tracking overseas gains and as the rupee hit a new all-time low against the dollar.

  • The most-active gold for June delivery on the Multi Commodity Exchange (MCX) was up 0.54 percent at Rs 29,129 by 5:02 p.m. The contract hit a low of Rs 27,855 on May 16, the lowest level since April 4.
  • “In a week, the prices have risen over 1,000 rupees. Buyers are finding it difficult to adjust with the price rise. They are waiting for a correction,” said a Mumbai-based dealer with a private bank, which imports bullion.
  • Global gold inched up towards $1,600 an ounce on Monday, tracking a steady euro after world leaders pledged to combat financial turmoil, although worries about Greece and the euro zone debt crisis continued to feed caution in the financial markets.
  • The rupee plays an important role in determining the landed cost of the dollar-quoted yellow metal. The rupee hit a new record low of 55 per dollar on Monday, from Friday's closing of 54.42/44.
  • “The festival season is already over. The wedding season is coming to an end. We are now heading towards a traditionally lean demand season. Jewellers will do restocking only if prices fall sharply,” the bank dealer said.

Copyright @ Thomson Reuters 2012