The demand for gold in the country was strong Wednesday, but with limited supplies were forcing jewelers to pay a premium near record high.
The actively traded gold February futures on the Multi Commodity Exchange (MCX) rose 0.12 percent to Rs 29,096 per 10 grams at 0945 GMT.
Rupee plays a major role in the determination of landed cost of the U.S. dollar quoted yellow metal. The rupee rose on Wednesday.
Overseas gold reached a new five-month low on Wednesday as investors awaited more U.S. financial data later this week to assess the outlook of bond buying by the Federal Reserve that have driven bullion’s appeal as hedge against inflation.
Silver March futures delivery on the MCX was 0.56 percent at 43,890 rupees per kg.
To alleviate the trade deficit, the country that is the world’s largest consumer of gold, has done what on the more expensive gold, the largest non-essential imports. The government has established the import duty at a record level of 10 percent.
“Nobody are giving us shares, all exporters will,” said Harshad Ajmera, proprietor of JJ Gold House in Kolkata. He added that premiums were traded at over $ 130 an ounce.
Government has tied the quantity of imports and exports, so it needs to import agencies to meet export orders before ship any bullion for local use.
Reported: Economic Times