Gold hovers near 7-week high; demand weak

Indian gold futures edged up, hovering near their highest level in seven weeks, as the rupee weakened to approach a record low, while physical demand remained weak due to seasonal slackness amid limited supplies after restrictions on consignment imports.

Also read: Buy MCX Gold August; target Rs 28150: Geojit Comtrade

India, the world's biggest buyer of the metal, hiked import duty earlier in the week to 8 percent from 6 percent, in addition to measures like restriction on consignment imports on banks, government-run trading houses and premiere and star trading agencies.

The government may take more steps if needed to curb gold inflows into the country, a senior finance ministry official said on Thursday.

"Since there is no demand people are not worried about supply, they will soon start worrying when they run out of supply," said Ketan Shroff, director with Penta Gold, a wholesaler in Mumbai, adding the supplies will last for a week or 10 days.

India's slackness in demand could last till July, until festivals re-start in August.

At 2:58 p.m., the most-active gold contract for August delivery on the Multi Commodity Exchange (MCX) was 0.11 percent higher at 27,936 rupees per 10 grams, still near the previous day's high of 28,038 rupees, a level last seen on April 15.

* The rupee plays an important role in determining the landed cost of the dollar-quoted yellow metal.

* Silver contract for July delivery was 0.12 percent lower at 44,456 rupees per kg.