Gold premiums ease due to lack of buying support

MUMBAI (Reuters) - Gold premiums in India, the world's biggest buyer of the metal, eased on Tuesday due to lack of buying support in the physical market, as traders survived on old stocks amid absence of fresh imports.

Premiums have fallen to $25 on London prices as against $35 on Monday, said Haresh Soni, chairman of the All India Gems and Jewellery Trade Federation.

"Demand is not there as people are not into buying mode," Soni said, giving the reasons for a fall in premiums.

To keep a lid on record trade deficit, the Reserve Bank of India tied gold imports for domestic use to exports, helping cut imports available to the local market by 60 percent. The government has also raised the import tax twice in 2013 to the current 8 percent.

Gold prices hovered near the keenly watched 28,000 rupees level.

At 2:38 pm, the actively traded gold for October delivery on the Multi Commodity Exchange (MCX) was 0.23 percent higher at 27,921 rupees per 10 grams due to a weaker rupee.

The rupee, which hit a record low on Tuesday, plays an important role in determining the landed cost of the dollar-quoted yellow metal.

Silver for September delivery on the MCX rose 0.81 percent to 42,100 rupees per kg.

(Reporting by Siddesh Mayenkar; Editing by Gopakumar Warrier)