Gold eases from 1-week high to Rs 28,950

Gold futures fell more than half a per cent on Wednesday, easing from their highest level in a more than a week, weighed down by overseas markets, while in the physical market jewellers struggled for supplies to meet post-harvest demand.

The most-active gold for February delivery on the Multi Commodity Exchange (MCX) was 0.50 per cent lower at Rs 28,950 per 10 grams at 4.49 p.m., down from the previous day's high of Rs 29,314, a level last seen on January 6.

Silver for March delivery on the MCX was 0.65 per cent lower at Rs 44,650 per kg.

Global gold retreated for a second session, dropping back from a one-month high, as strong U.S. retail sales and global economic growth prospects prompted a rally in stock markets and dented the metal's appeal as a safe haven.

"There is no gold supply available in the market. Even the government-run agency is charging about 10 per cent premium," said Harshad Ajmera, proprietor of JJ Gold House in the eastern city of Kolkata.

Premiums were quoted at $110 an ounce as against $130 last week, Ajmera said.

Indian gold imports may have fallen 70 per cent 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 in 2014 if new import rules are maintained.

To curb a rising trade gap, the Indian government slapped a record import duty of 10 per cent and tied imports for domestic consumption with exports.

Copyright Thomson Reuters 2014