Gold steady near 3-week high, traders stay away

Gautam Chhaochharia, ED & Head-India Mid Cap Research, UBS Securities advises Indian investors to be defensive. He is underweight on the financial sector. He likes Federal Bank, ICICI Bank at the current levels but not SBI. “4700-4800 is a good support le

Gold steady near 3-week high, traders stay away

Gold traders in India, the world's biggest buyer of bullion, took to the sidelines in the middle of the festival season as prices remained steady near their highest level in three weeks.

* The most active gold for October delivery on the Multi Commodity Exchange (MCX) was 0.05 per cent higher at Rs 30,198 per 10 grams as support from higher overseas market was offset by a stronger rupee at home.

* Gold prices on Tuesday were steady near the previous day's high of Rs 30,220, a level last seen on July 31.

* "Business is bad... some suppliers are selling gold at a discount of 1.5 per cent," said Harshad Ajmera, proprietor of JJ Gold House in Kolkata. "There could be some business due to festivals," he added.

* The festival season is underway in India and will continue till November. Gold imports have already declined due to doubling of import duty, and the drought could further dent demand from rural areas.

* Rural areas, which depend on monsoon rains for agricultural yields and income, contribute about 60 per cent of the country's demand.

* Silver edged higher to hit its highest level in a month due to overseas leads.

* Silver for September delivery on the MCX was 0.26 per cent higher at Rs 54,456 per kg, after hitting a high of Rs 54,488, a level last seen on June 21.

Copyright @Thomson Reuters 2012