A strong rupee helped jewellers in India defy gold’s rebound to $1,000 an ounce, with more last-minute buying expected before Diwali, the Hindu festival of lights, dealers said on Monday. Purchases from India, the world’s largest gold consumer, kept premiums for gold bars steady, at 70 to 75 US cents to the spot London price, in Singapore. Sales of scraps were limited in Hong Kong while Tokyo dealers saw liquidation from retail investors. The most-traded December gold contract on the Multi Commodity Exchange was 0.28% lower at Rs15,560 per 10 grams at 11:09am, after hitting a low of Rs15,549 in early deals. Domestic gold had touched a seven-month high of Rs16,009 in September, nearing the all-time high of Rs16,040 on 20 February. Spot gold added $3.10 an ounce to $1,004.40 after posting a weekly gain of 1 percent last week. It regained the $1,000-an-ounce level in volatile trade on Friday, when the dollar dropped after weaker-than-expected US jobs data. Gold was around 1.8% below an 18-month high of $1,023.85 struck in mid-September. “We’ve seen ongoing orders from the manufacturing side. Gold is over $1,000 but gold bars are still on a premium,” said Dick Poon, manager of precious metals at Heraeus in Hong Kong, adding that there was also demand from jewellers in Europe and the United States. Gold bars were quoted at a premium of 30 to 40 US cents to the spot London prices in Hong Kong, unchanged from last week. India, which accounted for more than 20% of global demand for gold jewellery, is in the midst of the festival season, which peaks with Diwali on 17 October. Weddings take place during the festive season and jewellery forms an essential part of the dowry basket. “The market is not flooded with scraps despite high gold prices. Demand from India is still quite good and that helps the premiums. People are just unwilling to offer premiums cheaply,” said a physical dealer in Singapore. Limited sales of scraps in Asia suggested that holders were waiting for more gains in price before they cashed in. In India, the rupee’s rise to fresh two-month highs ensured steady demand from jewellers. “If we can hold above the $990-$1,000 regions for the next few trading sessions, that’s going to be positive for gold for the longer term,” said Adrian Koh, an analyst with Phillip Futures in Singapore. “Gold traded below $990 but went back up to settle above $1,000. It looks positive technically,” said Koh, referring to Friday’s choppy session. Gold bars remained at a discount of 50 cents in Tokyo, reflecting persistent sales from investors after gold regained $1,000.

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