Gold prices hit one-week low, importers buy

Last Updated: Mon, Oct 15, 2012 08:40 hrs

MUMBAI (Reuters) - Gold importers in India picked up a few bargains on Monday to stock for key festivals as prices hit their lowest level in one week, tracking weak global leads.

Festivals are underway in India, the world's biggest buyer of the metal, and will peak with Diwali and Dhanteras next month. Weddings also take place during this period.

"Activity is there after gold came down to $1,740 (an ounce)," said a dealer with a private bullion importing bank in Mumbai.

The most-active gold for December delivery on the Multi Commodity Exchange (MCX) was 0.51 percent lower at 31,125 rupees per 10 grams, after hitting a low of 31,118 rupees, a level last seen on September 8, weighed by global leads.

Global gold dropped to a 2-1/2-week low, extending falls from the previous session, as stop-loss selling more than offset support from China inflation data, suggesting there was more room to ease monetary policy.

A weaker rupee limited the downside in prices. The rupee plays an important role in determining the landed cost of the dollar-quoted yellow metal.

Silver also edged lower, following the yellow metal.

Silver for December delivery on the MCX was 0.76 percent lower at 60,731 rupees per kg.

(Reporting by Siddesh Mayenkar; Editing by Anand Basu)

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