Gold traders stay away due to weak rupee

Gold traders in India, the world's biggest consumer of the metal, remained on the sidelines after a weak rupee limited the downside in prices.

After a 50 percent import duty hike to 6 percent on January 21, the Reserve Bank of India last week recommended putting curbs on imports, along with launching gold-linked products to limit shipments. Wedding and festival season are currently underway in India.

The actively traded contract gold for April delivery on the Multi Commodity Exchange (MCX) was 0.07 percent lower at Rs 30,793 per 10 grams.

"Not many deals are happening as the rupee depreciated on opening and gold is holding steady... People are still bearish on prices of gold," said a dealer with a state-run bullion dealing bank in Mumbai, adding "the situation might last for this week if prices don't correct."

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

In the overseas market, gold edged up despite a volatile euro on Monday, with thin trade due to the Lunar New Year break exaggerating movements.

The most-traded silver contract for March on the MCX was 0.02 percent lower at Rs 58,234 per kg.