Indian gold importers wary; weigh RBI comment

Customers look at gold bangles inside a jewellery shop in September 8, 2009.

MUMBAI (Reuters) - Gold importers in India, the world's biggest buyer of the metal, preferred to stay away from the market as they digested the recommendations from the RBI to limit imports even as prices continued to trade in a range.

After a 50 percent import duty hike to 6 percent on January 21, the Reserve Bank of India on Wednesday recommended putting curbs on imports, along with launching gold-linked products to limit shipments.

"Market is slow these days as overall sentiments are not so good because of RBI comments," said a dealer with a private bank in Mumbai, adding "if they come up with quota system, then market will become very ugly."

The most-active gold for April delivery on the Multi Commodity Exchange (MCX) was 0.09 percent higher at 30,738 rupees per 10 grams at 4:04 p.m., helped by a weaker rupee.

The rupee plays an important role in determining the landed cost of the dollar-quoted yellow metal.

Elsewhere, in the overseas market, gold inched up ahead of a European Central Bank meeting that could set the tone for the euro, while platinum and palladium held near their highest levels in 17 months on hopes of a better economic outlook.

Silver for March delivery on the MCX was flat at 58,425 rupees per kg.

(Reporting by Siddesh Mayenkar; Editing by Sunil Nair)