UPDATE 1-India's gold buying retreats on import duty hike

* Spot gold up at $1,113.55 an ounce XAU=

* London Brent crude flat at $76.28 a barrel LCOc1

* Rupee strong at 46.135 per dollar INR=IN

* U.S. existing home sales for Jan 1500 GMT [MI/DIARY]

MUMBAI, Feb 26 (Reuters) - Indian gold buying slowed on Friday afternoon as domestic prices rose after government proposed to hike import duty on precious metals, dealers said.

Finance Minister Pranab Mukherjee in his 2010/11 budget on Friday raised the duty on imports of gold and platinum to 300 rupees per 10 grams from 200 rupees earlier.

On silver, Mukherjee proposed a new duty of 1,500 rupees per kg from 1,000 rupees earlier. See [ID:nSGE61P0BP]

"There were a few deals in the morning, but after the duty hike announcement, nothing has happened so far... We survive on thin margins and even a small hike could impact business," said a dealer with a state-run bank in Mumbai.

Gold futures on the Multi Commodity Exchange (MCX) rose 0.45 percent to 16,769 rupees per 10 grams at 3:29 p.m., after hitting a high of 16,799 rupees earlier.

While international gold, which guides the domestic markets, was trading 1,112/1,112.80 an ounce as against the previous close $1,104.70/1,105.50.

"We have plenty of orders below $1,100 an ounce," said another dealer with a state-run bank.

Following were the prices being quoted by HDFC Bank in rupees in the spot market at 1:15 p.m. INBULL03:

Friday Thursday

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Gold .999/10 grams 16,810 16,573

Silver .999/kg 25,960 25,415

Following were prices in rupees on the Multi Commodity Exchange of India Ltd. at 3:30 p.m. <0#MAU:>:

Contract Current price Net change

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Apr gold 16,767 +73

Mar silver 25,454 +304

(Reporting by Siddesh Mayenkar; Editing by Ramya Venugopal)