Gold futures extended gains by more than 2% on Friday, recovering from its lowest level in more than a week, following a rise in overseas markets, and a weaker rupee, dealers said. The most-active gold for October delivery on the Multi Commodity Exchange (MCX) was trading 2.01% higher 28,360 rupees per

10 grams at 2:00 p.m., recovering from its Wednesday’s one-week low of 26,853 rupees.

Global gold bounced back in volatile trade after hitting its lowest level, but it was heading for a weekly loss as investors digested plans by US President Barack Obama to spur economic growth which could dent bullion’s safe-haven appeal.

The rupee weakened for a fifth consecutive session and touched a fresh one-year low, dragged down by the euro’s losses and continuing strong dollar demand from domestic oil refiners.

The rupee plays an important role in determining the landed cost of the yellow metal, which is quoted in dollars.

Physical buyers prefered to stay on the sidelines awaiting price dips ahead of a slew of festivals and weddings.

Demand will re-start in full swing within 15 days, said Mukul Sonawala, propreitor of wholesaler and retailer Narrondass Manordass in Mumbai.

Silver rose by Rs 550 to Rs 67,481 per kg in the futures market today on increased buying by traders on the back of a firm global trend.

Increasing demand in the spot market further fuelled the uptrend.

At the Multi Commodity Exchange, silver for delivery in March surged by Rs 550, or 0.82 per cent, to Rs 67,481 per kg, with a business turnover of 303 lots.

Likewise, the metal for delivery in December shot up by Rs 528, or 0.80 per cent, to Rs 66,125 per kg, with a business turnover of 15,232 lots.

Market analysts said increased buying by traders on the back of a rising trend in the spot and overseas markets, mainly led to the rise in silver futures prices.

Meanwhile, silver rose by 0.7 per cent to USD 42.63 an ounce in Singapore. – Reuters