India gold demand slack as prices hit 3-wk high

A woman wears a gold bangle at a jewellery shop in Siliguri October 1, 2008.

MUMBAI (Reuters) - India gold traders stayed on the sidelines on Wednesday as prices extended gains for the fourth session in a row to hit the highest level in nearly three weeks, dealers said.

* The most-active gold for April delivery on the Multi Commodity Exchange (MCX) was 0.48 percent higher at 28,516 rupees per 10 grams, after hitting a high of 28,520 rupees, a level last seen on February 3.

* The contract had gained 1.11 percent in the previous three sessions.

* "There is not much buying today as landed cost of 28,500 rupees is slightly expensive," said a dealer with a private gold importing bank in Mumbai.

* A firm rupee limited the rise in prices, analysts said. The rupee plays an important role in determining the landed cost of dollar-quoted yellow metal. <INR/>

* Silver also extended gains following the yellow metal.

* Silver for March delivery on the MCX was 0.33 percent higher at 57,343 rupees per kg.

(Reporting by Siddesh Mayenkar; Editing by Rajesh Pandathil)