Standard gold hit six-week high to surpass the psychological barrier of Rs 28,000 per 10 grams in Mumbai's Zaveri Bazaar to close at Rs 28,025 per 10 grams on Monday. Depreciating rupee restricted the benefit of gold's fall in the international markets to Indian consumers. During this period, gold fell by $35 to trade at $1,332.75 an ounce on Monday.
Gold premiums in India, the world's biggest buyer, jumped further due to the scarcity of the yellow metal ahead of a series of festivals even as prices hit their highest level in more than five weeks.
Premiums jumped to $25-30 an ounce on London prices as against $20 an ounce last week, said Bachhraj Bamalwa, a director at the All India Gems and Jewellery Trade Federation, adding "there is massive shortage of gold due to restrictions."
The Reserve Bank of India tightened gold imports, making them dependent on export volumes, with an eye on reducing a record current account deficit.
At 1022 GMT, the actively traded gold for August delivery on the Multi Commodity Exchange (MCX) was 0.73 per cent higher at Rs 27,834 per 10g, after hitting a high of Rs 27,865, a level last seen on June 20. Silver for September delivery on the MCX was 0.1 per cent higher at Rs 41,089 a kg.
Gold imports in India rose in July, Finance Minister P Chidambaram said on Monday, from 31.5 tonnes shipped in June.
The measures to curb imports had effect in June, but imports rose in July, the finance minister said, without giving details of July gold imports in tonnage or value terms.