At 2:51 pm, the most-active gold for June delivery on the Multi Commodity Exchange (MCX) was Rs. 140 lower at Rs. 29,465 per 10 grams, after hitting a low of Rs. 29,357, a level last seen on June 1.
Global gold fell for a second straight day to hit its lowest in four weeks, with investors shifting their money into risky assets for better returns on renewed optimism over the US economy.
“Activity is there in the market, physical interest is building up on correction … market will eye the non-farm payroll data due on Friday,” said a dealer with a private bullion importing bank in Mumbai.
India, the world’s biggest buyer of gold, has been trying to curb imports to put a lid on the record-high current account deficit. The government raised the import duty on gold, which it called a dead investment, by 50 per cent to 6 per cent in January.
Finance Minister P. Chidambaram suggested on Tuesday that the government is unlikely to raise the import tax on gold further to avoid gold smuggling.
However, a weak rupee kept the downside limited. The rupee plays an important role in determining the landed cost of the yellow metal, which is quoted in dollars.
Copyright @ Thomson Reuters 2013