MUMBAI Indian gold futures slipped on Friday to trade near their lowest level in a week, but price declines were not enough for importers to book the metal ahead of weddings and festivals. Silver also fell from the highest level in a week.
The wedding season will begin by mid-January and continue until May. Festivals will also take place during this period. India is the biggest buyer of the metal.
The actively traded gold for February delivery on the Multi Commodity Exchange (MCX) was 0.15 percent lower at 30,889 rupees per 10 grams at 3:12 p.m., following weak leads from international markets and on a stronger rupee. It hit a low of 30,841 rupees, close to the lowest level in a week struck on Thursday.
Overseas gold inched lower but was headed for its biggest weekly rise in more than a month, following a decision by the European Central Bank to keep rates unchanged.
The rupee, which was stronger, plays an important role in determining the landed cost of the dollar-quoted yellow metal.
"There are a few stray deals. People are not interested in stocking up at these levels as prices are in the same range since three-four days," said a dealer with a private bullion importing bank.
"There was an initial interest in the market after rumours of import tax, but after a few days buying fizzled," the dealer added.
India could raise import duty on the yellow metal from the current 4 percent, as part of measures to contain a record high current account deficit. The central bank has also recommended limits on value and volumes of gold imports.
Silver for March delivery was 0.35 percent lower at 58,472 rupees per kg, down from the previous session's highest level in a week of 58,730 rupees.
(Reporting by Siddesh Mayenkar; Editing by Subhranshu Sahu)