(Reuters) – Gold demand in India advanced on Wednesday, responding to correction in overseas prices, but gold supply stayed constrained due to limits on imports.
The most-active gold contracts for December delivery were 0.99% lower, traded at 30,110 rupees per 10 gram at 04:42 p.m. on the Indian Multi Commodity Exchange (MCX).
Jewelers are trying to restock inventories at smaller grades but supplies are restricted. Suppliers are asking for very high premiums over London prices, numerous jewelers were not prepared to pay such high charges.
Gold rose overseas after striking a four-week trough in the previous meeting, whereas prices appeared ready to check farther lows as new doubt over the destiny of U.S. incentive assesses dented bullion’s apply as a hedge against inflation.
Dhanteras, the biggest gold buying festival, and Diwali previous this month were celebrated in India, when shortage of the precious metal and higher charges pushed consumers to buy silver and diamond jewelry.
The marriage season is underway in the world’s large-scale buyer of gold.
The rupee gained after touching a nine-week low at 63.90 to the dollar earlier in the day. A powerful rupee makes trades of gold and shiny cheaper.