Gold demand improves; supply remains tight

MUMBAI (Reuters) - Gold demand in India improved on Wednesday, responding to correction in overseas prices, but supplies remained constrained due to restrictions on imports.

* The most-active gold contract for December delivery was 0.99 percent lower at 30,110 rupees per 10 gram at 4.42 pm on the Multi Commodity Exchange (MCX).

* "Jewellers are trying to replenish inventory at lower levels but supplies are limited," said Harshad Ajmera, the proprietor of JJ Gold House, a wholesaler in Kolkata.

* "Suppliers are seeking very high premiums over London prices," said Ajmera, adding many jewellers were not ready to pay such high prices.

* Overseas gold rose after hitting a four-week trough in the previous session, although prices seemed poised to test further lows as fresh uncertainty over the fate of U.S. stimulus measures dented bullion's appeal as a hedge against inflation.

* India celebrated Dhanteras, the biggest gold buying festival, and Diwali earlier this month, when scarcity of the yellow metal and higher prices pushed consumers to buy silver and diamond jewellery.

* The wedding season is underway in the world's biggest consumer of gold.

* The rupee rose after hitting a nine-week low of 63.90 to the dollar earlier in the day. A strong rupee makes imports of gold and silver cheaper.

* The silver contract for December delivery was 1.11 percent lower at 47,220 rupees per kg on the MCX.

(Reporting by Rajendra Jadhav; Editing by Subhranshu Sahu)