India gold sees profit-booking on near-record prices

By Ruchira Singh

MUMBAI, Sept 30 (Reuters) - While overseas gold remains supported by safe haven buying in the midst of an unresolved financial market crisis in the U.S., in India, investors are choosing to take profits with prices near all-time highs.

Dealers said on Tuesday, investors have been selling bullion and jewellery, flooding the local market with stocks and depressing prices, looking to re-enter only at far lower levels. "Over here the banking sector and economy are stable, so there is no panic buying of gold," said Rajan Mehta, executive director at Benchmark Asset Management Co that manages the biggest gold exchange-traded fund.

Dealers said investors started to take profits when local gold scaled 13,000 rupees per 10 grams late last week.

"Investors who bought gold about a month back below 12,000 rupees per 10 grams, are taking profits," said Kapilkumar of Chokshi Arvind Jewellers, a trader in Mumbai.

Buyers would wait till prices fall to around 12,500 rupees, or around $830 an ounce, Kapilkumar added.

On Tuesday, December gold on the Multi Commodity Exchange of India Ltd (MCX) traded at 13,542 rupees, not too far from the highest level recorded at 13,764 rupees on July 15 on the continuation charts MAUc1.

In the spot market, rates were higher -- Scotia quoted gold at 13,732 rupees at 4:15 p.m.

A weaker rupee at 46.96 to a dollar, its weakest level since June 2003, propped up gold prices as most of the metal is imported and paid for in the U.S. currency.