Gold futures fall on global cues

NEW DELHI (Reuters) - Gold futures dropped on Monday tracking global prices, which fell on expectations that an improvement in the U.S. economy would lower demand for the yellow metal.

* At 3:38 p.m., the most-active gold for February delivery was down 0.47 percent at 28,426 rupees per 10 grams on the Multi Commodity Exchange.

* Silver for March delivery was down 1.59 percent at 44,432 rupees per kg.

* International gold edged lower, heading for its biggest annual loss in more than three decades at nearly 30 percent, as firm equities and the prospect of a recovery in the global economy stole its shine.

* The partially convertible rupee, which plays a key role in determining the landed cost of the dollar-quoted metal, edged lower as a large state-run bank likely bought dollars on behalf of oil refiners.

* "Gold-exchange traded fund outflows also indicate weaker investor interest," Kotak Commodity Services analysts wrote in a note. "However, choppiness in the U.S. dollar has lent some support. Gold may continue to trade weaker on Monday on optimism about the U.S. economy."

* Indian gold imports may fall 70 percent in the final quarter of 2013 from 255 tonnes in the year-ago period and are expected to be half the usual levels at 500-550 tonnes next year if new import rules are maintained, a top trade body official said.

* To curb a rising trade gap, the government slapped a record import duty of 10 percent earlier this year and tied imports for domestic consumption with exports.

(Reporting by Krishna N Das; Editing by Sunil Nair)