India gold demand turns dull as prices jump

A woman wears a gold bangle at a jewellery shop in Siliguri in this October 2008 file photo. India's gold demand turned subdued on Friday, after having picked up in the past few sessions as prices rose, dealers said.

MUMBAI (Reuters) - India's gold demand turned subdued on Friday, after having picked up in the past few sessions as prices rose, dealers said.

"We have hardly sold 10 kgs since morning as prices have jumped... till yesterday there were buyers," said a dealer with a state-run bank in Mumbai.

The most traded June contract extended gains for a third day and was 0.34 percent higher at 14,648 rupees per 10 grams at 2:03 p.m. as China revealed its huge gold reserve rise.

Gold prices have risen about 3.7 percent in the past three weeks.

Dealers said a strong rupee, which makes the dollar denominated asset cheaper, kept a lid on gains.

Indian consumers, who bought around 49 tonnes of gold for last Akshaya Tritiya, had been purchasing as prices fell about 13 percent from an all-time high of 16,040 rupees struck on Feb. 20.

But, a sudden surge in prices prevented traders from entering into fresh deals.

"I have plenty of advance orders at $880 (an ounce level)," said another dealer with a private bank.

Akshaya Tritiya, which falls on April 27, is the second-most auspicious day to buy gold after Dhanteras, traders say.