India gold buying turns weak as prices near peak

India's wholesale gold buying turned weak on Wednesday afternoon as prices traded near the all-time high, but dealers said the underlying demand remained strong due to the ongoing festival season.

"Who would buy at these highs? From yesterday gold has gone up by 200 (Rs per 10 grams)," said a dealer with a state-run bank, which deals in bullion.

Gold futures traded 0.07 per cent higher at Rs 19,182 per 10 grams, after hitting a high of Rs 19,207, within reach of the record high of Rs 19,211 struck in the previous session.

"There is pent-up demand in the market, but they want attractive levels like that of Rs 18,500," said another dealer with a private bank in Mumbai.

Traditionally, demand for gold in India, the world's largest consumer of bullion, is high during the September-November festival season. Dhanteras, considered an auspicious day for buying gold, falls in November.

A Reuters poll has estimated India's gold import in 2010 at 504.5 tonnes, up by 24.5 tonnes from last year.