Gold demand edges up as prices drop; strike hurts

Gold demand in India, the world's biggest consumer of the metal, edged higher on Wednesday after prices fell near their lowest level in more than six months, although a nationwide strike limited the revival in demand.

As of 4.03 pm, the most active gold contract for April delivery on the Multi Commodity Exchange (MCX) was 0.46 percent lower at Rs 29,914 per 10 grams, after falling to Rs 29,909 earlier.

The futures hit a six-month low of Rs 29,794 on January 31.

"The demand is coming at the current level as prices are trading below the key psychological level of Rs 30,000," said a Mumbai-based dealer with a private bank dealing in bullion.

"Had it been a normal trading day, we could have seen more demand. The strike is hurting jewellers' participation."

Many Indian banks were closed and public transport disrupted on Wednesday because of a strike by trade unions protesting against high prices, but financial markets were open.

The rupee, which plays an important role in determining the landed cost of the dollar-quoted yellow metal, rose on Wednesday.

India's domestic bond and currency markets are closed on Tuesday for a banking holiday.

The trade ministry has recommended suspension of gold jewellery imports from Thailand, said a trade ministry statement issued on Wednesday.

Globally, gold struggled to rise significantly above USD 1,600 an ounce on Wednesday, as ebbing interest in the safe-haven metal amid signs of an improving global economic outlook offset purchases by bargain hunters in Asia.

The silver contract for March delivery on the MCX was 0.37 percent lower at Rs 54,965 per kg.