Gold near 3-week low, importers wait for further fall

Gold importers in India, the world's biggest buyer of the metal, waited for prices to fall further as the yellow metal was trading near its lowest level in more than three weeks due to a stronger rupee, offsetting firm global markets.

At 2:18 p.m., the most-active gold for October delivery on the Multi Commodity Exchange (MCX) was 0.18% lower at 31,254 rupees per 10 grams, after hitting a low of 31,213 rupees, a level last seen on September 3, due to a firmer rupee.

"Levels of 31,200-31,300 look attractive... from a hedging perspective, the rupee has gained bullion players' confidence," said a dealer with a private bank importing bullion.

The rupee plays an important role in determining the landed cost of the dollar-quoted yellow metal.

Global gold edged up from its two-week low, but a stronger dollar capped the gains.

The festival and wedding season is underway in India, and will continue till November, before tapering off in December.

Gold imports to India are likely to fall by as much as 26%, or by 200 tonnes to 250 tonnes, in 2012 as record high prices hit consumer budgets.

Silver futures also edged lower following the yellow metal.

The most-active silver for December delivery on the MCX was 0.14% lower at 62,570 rupees per kg.