Indian gold importers retreat as rupee weakens

MUMBAI: Gold importers in India, the world's biggest consumer of the metal, retreated as a weaker rupee limited the downside in prices, despite weak overseas markets.

After a 50 percent import duty hike to 6 percent on Jan. 21, the Reserve Bank of India last week recommended putting curbs on imports, along with launching gold-linked products to limit shipments. Wedding and festival season are currently underway in India.

The most-active gold for April delivery on the Multi Commodity Exchange (MCX) was 0.08 percent lower at 30,617 rupees per 10 grams.

"Buying is there, but not in a big way as rupee has depreciated and overall costing remains in the same range. People are hoping to buy below 30,000 rupees," said a dealer with a private bullion importing bank in Mumbai.

The rupee, which traded weaker, plays an important role in determining the landed cost of the dollar-quoted yellow metal.

Overseas gold extended losses to hit its weakest in more than a month in holiday-thinned trade.

Silver for March delivery on the MCX was 0.39 percent lower at 57,435 rupees per kg.