Gold importers in India, the world's biggest buyer of the yellow metal, tried to clear out old stocks before placing new orders despite lower prices on Monday.
Traders rushed in to buy in the first two weeks of January after the finance minister on January 2 hinted at a tax rise. Buying has since been lacklustre.
On January 21, the government hiked import duty on the yellow metal to 6 percent from the earlier 4 percent.
"There is little buying as old stocks are yet to be sold out in the market. We are hopeful of the stock getting cleared this week," said a dealer with a state-run bullion importing bank.
At 3:15 p.m., the actively traded gold for February delivery on the Multi Commodity Exchange (MCX) was 0.20 percent higher at 30,393 rupees per 10 grams.
The rupee, which traded weaker, plays an important role in determining the landed cost of the dollar-quoted yellow metal.
In the overseas market, gold edged up but struggled to break away from a two-week low hit in the previous session, with a brighter global economic outlook dampening the metal's appeal as a safe haven.
Silver for March delivery on the was 0.05 percent higher at 58,277 rupees per kg, still near its lowest level in two weeks.