Gold traders stay away as prices hit 1-month high

Waited for bargains ahead of festivals next month as prices extend gains for another session

Indian gold traders waited for bargains ahead of festivals next month as prices extended gains for another session, nearing the elusive Rs 30,000 mark.

The most-active gold contract for August delivery on the Multi Commodity Exchange (MCX) was 0.30% up at Rs 29,878 per 10 grams at 09:40 am, after hitting a high of Rs 29,930, its highest since June 28.

Gold imports declined in the first half of the year, and industry officials expect the trend to continue.

"People are not happy with the sudden jump in prices, business is not that great... there could be a little buying due to festivals from next month," said Harshad Ajmera, proprietor of JJ Gold House in Kolkata.

The festivals season starts in August in India, the world's biggest buyer in 2011, and continue till November.

Traders are also eyeing the monsoon forecast for the second half of the June-September season, vital to gold demand in rural areas.

Monsoon rains, which have been below normal so far, are vital to the farm economy in rural areas that account for 60% of gold demand.

Silver also edged higher, following the yellow metal.

* Silver for September delivery on the MCX was 0.69% higher at Rs 54,197 per kg.