Gold demand in India stayed weak on Monday in a seasonally slack period as participants awaited further falls after prices eased from their highest level in three weeks.
Gold imports into India, the world's biggest buyer of the metal, fell about 81 percent on month to 31.5 tonnes in June after the government raised import duty and stopped consignment imports, but demand could rise in coming months, creating problems for a government battling a record high trade deficit.
"Demand is slow... supplies are a little low," said Ketan Shroff, director with Penta Gold, adding traders are not feeling the pinch of lower supplies as demand is very less.
Most of the demand is met by state-run trading agencies such as MMTC, State Trading Corp and PEC, along with Scotia Bank, while other private and public banks await guidelines from the central bank on imports on cash basis after a ban on consignment basis.
At 3:10 p.m., the actively traded gold for August delivery on the Multi Commodity Exchange (MCX) was 0.04 percent lower at 26,731 rupees per 10 grams tailing global leads, after hitting a high of 26,925 rupees, a level last seen on June 24.
A weaker rupee kept the downside in prices limited. The rupee plays an important role in determining the landed cost of the dollar-quoted yellow metal.
Silver for September delivery on the MCX was 0.1 percent higher at 41,520 rupees per kg.