India gold traders stay away as prices rebound

India gold traders continued to stay away from fresh deals on Wednesday afternoon as prices rebounded from their intra-day lows as the dollar weakened against other major currencies, dealers said.                                           

"A sudden spike is always a problem for gold demand, but the rupee is in a supporting mode," said a dealer with a private bank in Mumbai, which imported about 3-4 tonnes in January.      

International spot gold was trading $1,120.051,120.85 an ounce, rising from the intra-day low of $1,111.67 against the previous close of 1,113.951,114.75 an ounce.                                           

"I have sizeable orders below $1,100 levels," said another dealer with a state-run bank.

The Indian rupee extended gains in the afternoon session mirroring moves in the local sharemarket, which gained more than 2 percent, while the dollar's losses against major units also supported.

A strong rupee makes the dollar-quoted asset cheaper for local traders.