Rising Re may help in boosting gold jewellery demand

Hardening of rupee against dollar in the last few days has helped in capping gold prices which may boost the domestic demand for jewellery, MMTC, the country's largest importer of the precious metal, said.

"During the last few days the prices have dipped slightly and I hope that this will help in boosting the jewellery demand," MMTC chairman and managing director Sanjiv Batra said in New Delhi on Tuesday.

After surging to Rs 16,220 level in September, gold prices slightly eased at a time when festival and marriage season is about to pick up.

Several gold players, including MMTC and World Gold Council are organising promotional sales in major cities.

Last year, India's total gold import was at 600 tonnes, of which MMTCs share was 27.5 per cent that is 146 tonnes.

This year, the company aims to increase the share by 30 per cent of the total import, Batra said adding that during April-August, India has imported about 265 tonnes of gold, out of which MMTC had shipped in 65 tonnes.

Batra said he is optimistic about the rise in imports in rest of the calendar year mainly due to current dip in prices.

On reports of International Monetary Fund selling gold to fund soft loans to poorer countries, Batra said, when some banks sell, the prices automatically softens and "We hope the same will happen with the yellow metal this time."

The Indian rupee today hit a six-week high of 47.86 against the dollar, the highest since August 10 when it stood at Rs 47.74 per dollar.