India gold softens, but buyers eye further lows

MUMBAI (Reuters) - India's gold prices softened on Monday, helped by a stronger dollar in foreign markets, but local demand received only a feeble fillip, dealers said.

"It is quite surprising, despite the good correction, people are not there to buy," said a dealer in a private bank.

Overseas gold, that guides local prices, fell to a week's low as the dollar strengthened, lessening the appeal of the metal as an alternate investment.

Crude oil, that eased further from its all-time highs in the previous week on easing geo-political tensions in the Middle East, also extended a bearish pressure on gold.

"Today's correction has induced some demand, but if prices fall a bit more, it can increase," said Harshad Ajmera, proprietor of JJ Gold House, a wholesaler in Kolkata.

India's lean season, now on, has kept retail buying low as people wait for the festivals to start after September.

Ajmera said prices closer to 12,500 rupees per 10 grams could encourage more buyers to pick up gold to prepare for the busy season.

Following was the price of .995 gold in the spot market in rupees per 10 grams at 1:15 p.m. :

Bank Monday Friday