Gold futures edge lower; mute physical buying
MUMBAI-INDIA (May 24) Gold futures edged lower on Friday as a strong rupee offset gains in the world market, while demand was lacklustre in the physical market after many weeks of hectic buying.
"We are entering into a lean season in India, so physical buyers will be on the sidelines as we have seen huge buying in April and May," said a trader with a private-run bank.
The Reserve Bank of India (RBI) restricted banks from consignment imports of the yellow metal, except for jewellery exporters, after imports in April jumped more than 150 percent, despite a 50 percent hike in import duty in January.
"I would say that huge buying (in April and May) has taken care of the first and second quarter (demand) as well," the trader said.
The actively traded gold contract for June delivery on the Multi Commodity Exchange (MCX) was 0.50 percent lower at 26,308 rupees per 10 grams at 3.31 p.m.
Global gold rose, on track for its strongest week in a month, after a U.S. Federal Reserve official said there was no rush to end the monetary easing programme that has increased the metal's appeal as a hedge against inflation.
The rupee, which gained marginally against the dollar, plays an important role in determining the landed cost of the dollar-quoted yellow metal.
Silver contract for July delivery on the MCX was 0.77 percent lower at 43,238 rupees per kilogram.