India gold demand low as prices edge up

MUMBAI (Reuters) - India's gold demand was low on Thursday on higher overseas prices and a steady supply from continued scrap sales locally met the low-kew seasonal demand, dealers said.

"There is no demand... we just saw some demand earlier this week when gold was at $850-$860 an ounce," said D.P. Naresh of Micro International, a large bullion trader in Bangalore.

A dealer in a Mumbai bank also said buyers are waiting for lower levels to revisit, particularly a fall to around 11,000 rupees per 10 grams or so.

Overseas gold, which guides the local market, jumped nearly one percent on firmer oil and safe-haven buying amid turmoil in the financial markets. On Jan. 14, gold saw an all-time high at $914 an ounce.

Traders said scrap sales of jewellery and bars are continuing to fill the local market with supplies, easing the demand for more expensive imported gold stocks.

"Both selling and buying is moderate," said Kapilkumar of Chokshi Arvind Jewellers in Zaveri Bazaar, who buys scrap from consumers, melts it to form bars and sells it to local jewellers.

"Bar sales are also taking place," he added.

A fall in local stock markets this week has had investors selling their gold holdings, adding to local supplies.

Following was the price of .995 gold in the spot market in rupees per 10 grams at 1:20 p.m. :