Indian gold importers on sidelines as rupee eases further

Gold importers in India preferred to stay on the sidelines on Monday as a weaker rupee limited the downside in prices, a week after import duties were left intact.

Imports have slowed in March due to tight liquidity ahead of the fiscal year-end.

"Buying is slow due to rupee depreciation... imports will slow down further due to financial year ending," said Haresh Acharya, head of bullion desk at Parker Bullion.

At 1:38 p.m., the most-active gold for April delivery on the Multi Commodity Exchange (MCX) was 0.12 per cent lower at Rs 29,705 per 10 grams.

The rupee, which traded weaker on Monday, plays an important role in determining the landed cost of the dollar-quoted yellow metal.

Overseas gold firmed, bouncing from a one-week low hit on Friday, supported by physical buying in Asia, but robust U.S. economic data dented bullion's safe-haven appeal.

India kept its gold import duty unchanged in Thursday's federal budget, defying industry expectations that the world's biggest bullion buyer would increase rates to curb demand and rein in a record current account deficit.

Silver for March delivery on the MCX was 0.23 per cent lower at Rs 53,741 per kg.

Copyright @ Thomson Reuters 2013