India gold drops down further on strong dollar

News

oi-Monika

By Monika Nihalani

Published: Saturday, November 26, 2011, 15:23 [IST]

Gold demand in India has been facing continuous pressure from rising dollar. Indian Rupee has depreciated more than 11% since April against US Dollar, which has made Indian gold imports more expensive which means Indian gold traders have to shell out more rupees per dollar as gold is priced in dollar.

On the flip side, the physical demand of gold is also steady as buyers preferred to wait for sometime before making any fresh purchases as they expect prices may dip further.

MCX gold futures continued with falling streak. December gold contract on MCX dipped at the level of Rs 28,360 per 10 grams on Friday.

The metal was trading on sidelines at Rs 28,406 – Rs 28,407 per 10 grams at 13:30 pm IST.

Gold for February contract also fell to Rs 28,673 per 10 grams after opening at Rs 28,709 per 10 grams.

Overseas gold prices were hovering in the range of US$ 1,677 – US$ 1,680 a troy ounce.