India gold demand rises on restocking

The salesman displays gold bangles to a customer at a jewellery showroom in Chennai March 23, 2012.

MUMBAI (Reuters) - Gold demand in India, the world's biggest buyer of the metal, picked up on Monday as buyers were scrambling to purchase limited stocks available with local banks after most overseas sellers left for the Christmas vacation.

* The actively traded gold contract for February delivery on the Multi Commodity Exchange (MCX) was 0.26 percent lower at 30,832 rupees per 10 grams as of 4:01 p.m.

* "Demand is good. Buyers are placing orders for limited stocks with banks. They (buyers) know the supply situation will remain tight for the next few days. Overseas suppliers are going on leave," said a Mumbai-based dealer with a state-run bank.

* "Buyers are also comfortable with prices. They are not hesitating in making deals below 31,000 rupees. Jewellers are restocking," the dealer said.

* The rupee, which rose on Monday, plays an important role in determining the landed cost of the dollar-quoted yellow metal.

* Overseas gold ticked up a little in thin pre-holiday trade on Monday as equities regained some strength, but prices stayed near their weakest in four months as the U.S. fiscal stalemate drove investors to the sidelines.

* The March silver contract on the MCX was down 0.13 percent at 58,087 rupees per kg.

(Reporting by Rajendra Jadhav; Editing by Subhranshu Sahu)