Gold premiums in India eased to $120 an ounce on Wednesday from their peak of $160 last week on supplies from the Multi Commodity Exchange, though gold futures remained steady.
"There was some delivery from the exchange, which has put pressure on premiums," said Bachhraj Bamalwa, director at the All India Gems and Jewellery Trade Federation (GJF).
The physical market has been estimated to receive 200-300 kilograms from the Multi Commodity Exchange after expiry of the gold contract. India consumes about 1.5-2 tonnes of the yellow metal in the form of jewellery or coins and bars per day.
"I got 15 kgs after a gap of a month from Scotia... it's getting difficult to meet requirements of smaller jewellers," said Harshad Ajmera, proprietor of JJ Gold House, a wholesaler in Kolkata.
Indian gold imports may fall 70 percent in the final quarter of 2013 from 255 tonnes in the year-ago period and are expected to be half the usual levels at 500-550 tonnes next year if new import rules are maintained, said a top trade body official.
Gold futures in India were flat as pressure from weak overseas markets was offset by a weaker rupee at home.
At 1601 IST, the most-active gold contract for February delivery on the Multi Commodity Exchange (MCX) was 0.02 percent lower at 29,530 rupees per 10 grams.
Silver for March delivery on the MCX was 0.05 percent higher at 45,471 rupees per kg.