Gold hits 10-month low, attracts bargain buyers

MUMBAI (Reuters) - Gold extended losses to hit its lowest level in ten months on global cues, attracting bargain hunters in the wedding season.

* At 7:31 p.m., the most-active gold for June delivery on the Multi Commodity Exchange (MCX) was at 29,543 rupees per 10 grams, after hitting a low of 29,357 rupees, a level last seen on June 1.

* Global gold fell for a second straight day to hit its lowest in four weeks, with investors shifting their money into risky assets for better returns on renewed optimism over the U.S. economy.

* "Activity is there in the market, physical interest is building up on correction ... market will eye the non-farm payroll data due on Friday," said a dealer with a private bullion importing bank in Mumbai.

* India, the world's biggest buyer of gold, has been trying to curb imports to put a lid on the record-high current account deficit. The government raised the import duty on gold, which it called a dead investment, by 50 percent to 6 percent in January.

* Finance Minister P. Chidambaram suggested on Tuesday that the government is unlikely to raise the import tax on gold further to avoid gold smuggling.

* However, a weak rupee kept the downside limited. The rupee plays an important role in determining the landed cost of the yellow metal, which is quoted in dollars.

* Silver for May delivery on the MCX was 533 rupees lower at 50,940 rupees per kg.

(Reporting by Siddesh Mayenkar; Editing by Jijo Jacob)