The yellow metal was trading around Rs 30,638 per 10 grams, the lowest since August 30, in the spot market.
"Jewellers are active in the market. Investment demand is still weak," said a Mumbai-based dealer with a state-run bank.
"Gold is trading above Rs 30,000. If it falls below Rs 30,000, then we can see a significant improvement in retail demand. Sentiments will change," the dealer said.
The wedding season will continue till early January and gold is an important gift item at marriages.
The actively traded gold contract for February delivery on the Multi Commodity Exchange was 0.85 per cent higher at Rs 30,740 per 10 grams in intraday trade, after falling to Rs 30,370 on Thursday night.
The rupee, which fell nearly 1 per cent on Friday, plays an important role in determining the landed cost of the dollar-quoted yellow metal.
Overseas gold slipped, holding near a four-month low hit in the previous session and on track for its steepest weekly drop since June, as the euro softened and US talks to avoid a fiscal crisis stalled again.
March silver contract was up 0.98 per cent at Rs 57,915 per kg.
Copyright @ Thomson Reuters 2012