Indian gold futures edged lower on Wednesday, near their lowest level in more than 19 months, on losses in the global markets and a stronger rupee, triggering bargain buying among physical traders.
The actively traded gold contract for June delivery on the Multi Commodity Exchange (MCX) was 181 rupees lower at 25,585 rupees per 10 grams.
US gold for June delivery was 0.37 percent lower at $1,382.2 an ounce. The rupee, which firmed in trade on Wednesday, plays an important role in determining the landed cost of the dollar-quoted yellow metal.
“There are many buyers after consolidation in prices … sales will rise for Akshaya Tritiya,” said SK Jain, vice-president of All India Sarafa Association.
India, the world’s biggest buyer of the yellow metal, will celebrate Akshaya Tritiya, a key gold buying festival, next month. The wedding season has also begun and will continue till early June.
India has been trying to curb imports to put a lid on the record-high current account deficit. The federal government raised the import duty on gold, which it called a dead investment, by 50 percent to 6 percent in January.
On April 2, Finance Minister P. Chidambaram suggested the government was unlikely to raise the import tax on gold further to avoid gold smuggling.
May silver was 592 rupees lower at Rs 42,603 per kilogram.
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