India gold demand retreats as prices hit high

India gold buying retreated on Tuesday afternoon from a late pick-up in the previous session as prices rose to a record, with a weaker rupee also making the dollar-quoted yellow metal expensive, dealers said.

"Domestic buying is almost nil as rupee is not supportive, though I covered a few kgs for exporters," said a dealer with a state-run bullion dealing bank in Mumbai.

Gold on the Multi Commodity Exchange (MCX) recorded a new all-time high of Rs 19,429 per 10 grams on Tuesday afternoon tracking firm overseas markets, and a weaker rupee.

"They are all reluctant to buy at the new high, but accept these prices later on," said another dealer with a private bank.

Traders had been buying the yellow metal to stock for the festive season, which is currently underway in the world's largest consumer of the yellow metal.

"There was buying until yesterday, I did about 70-80 kgs at $1,312-1,317 (an ounce)," said the state-run bank dealer.

Festive demand will peak with dhanteras slated in November, when jewellers register highest sales every year. Weddings also takes place during the festive season.

This has prompted MMTC, country's second-largest gold importer, to hike December quarter imports by 37 per cent to 55-60 tonnes.