Gold buyers continue to pick bargains

A salesman displays a gold necklace at a jewellery shop in Agartala, capital of Tripura, July 9, 2009.

MUMBAI (Reuters) - India's gold buyers continued to pick bargains on Tuesday to re-stock for weddings as international prices fell to a three-week low overnight, but a weak rupee weighed on sentiment, dealers said.

"People who were waiting for lower prices are buying now mainly for weddings. I must have sold 100 kgs since yesterday evening," said Pankaj Kumar Agarwal, director, Lucknow-based Brijwasi Bullions and Jewellers.

"I did around 350 kgs yesterday evening, and even today there are buyers," said another dealer with a bullion dealing state-run bank in Mumbai.

International spot gold was $1,039.60/1,039.40 an ounce at 2:19 p.m., after hitting a low of $1,037.45 in the previous session, a level last seen on Oct. 7.

However, dealers said, a weak rupee, which makes the dollar-quoted gold expensive, weighed on sentiment.

"Unfortunately, rupee is not helping, we would have seen bigger sales if the rupee had stayed where it was yesterday," said the dealer.

The rupee continued to trade close to 3-week lows weighed by losses in local shares and on the back of lower regional units.

Dealers said traders still sought lower prices to replenish stocks after better-than-expected Dhanteras and Diwali sales.

"They would buy in huge quantities if prices move towards $1,033," added another dealer with a state-run bank.

Indians bought 56 tonnes of gold for Dhanteras and Diwali festivals last week, up 5.7 percent on year, even as prices struck a record high, the World Gold Council (WGC) said.

(Reporting by Siddesh Mayenkar; Editing by Sunil Nair)