Gold demand moderate as prices hit two-week low

MUMBAI (Reuters) - Gold futures extended losses on Tuesday to hit their lowest level in more than two weeks on a strong rupee and a drop in overseas prices, though demand was moderate in local spot markets as traders sought some price stability.

At 1500 IST, the actively traded gold for October delivery on the Multi Commodity Exchange (MCX) was 1.11 percent lower at 31,189 rupees per 10 grams, after hitting a low of 31,150 rupees, a level last seen on August 23.

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

In the overseas market, gold tracked oil lower on Tuesday after Russia offered to work with Damascus to put Syria's chemical weapons under international control, while firmer equities also dented the precious metal's appeal.

"Some traders are putting orders as the government has clarified import rules and prices are also falling. But some jewellers are waiting for more correction in prices," said a Mumbai-based dealer with a private bank.

Customs department clarified new gold import rules last week.

Silver for September delivery on the MCX was 2.01 percent lower at 53,030 rupees per kg.

(Reporting by Rajendra Jadhav; Editing by Supriya Kurane)