MUMBAI Gold importers in India, the world's biggest buyer of the metal, refrained from buying fresh deals, as they struggle to clear their old stock with duty hikes drying up demand.
Gold for February delivery on the Multi Commodity Exchange (MCX) was almost steady at 30,762 rupees per 10 grams by 7:41 p.m.
"The market is totally calm due to duty hike and rupee depreciation," said a dealer with a private bullion-importing bank in Mumbai, adding huge stocks have been piled up in the market in early January in anticipation of a duty hike.
"They now have an advantage of 2 percent due to the duty hike," the dealer said.
India on Monday hiked import duty on processed gold to 6 percent from 4 percent to curb purchases and rein in a ballooning fiscal deficit. On Tuesday, it more than doubled the duty on gold dore bars and ores.
The rupee, which weakened on Tuesday, plays an important role in determining the landed cost of the dollar-quoted yellow metal.
In the overseas market, gold prices rose above $1,690 per ounce as better-than-expected German economic data lifted the euro versus the dollar, but gains were capped by strong chart resistance and losses in European stocks.
(Reporting by Siddesh Mayenkar; Editing by Gopakumar Warrier)