Gold prices fall 1% on MCX; silver at four-month low

Gold importers in India, the world's biggest buyer of the metal, took advantage of a near 1 percent fall in prices on Friday to stock up amid continued talk of an import duty hike.

The actively traded gold for February delivery on the Multi Commodity Exchange (MCX) was 0.80 percent lower at Rs 30,698 per 10 grams at 3:14 p.m.

"Activity is good due to a correction in prices, which was anticipated. Few people are trying to stock up at these levels in case a customs duty hike comes in," said a dealer with a private bullion importing bank.

A strong dollar overseas also contributed to the fall in the yellow metal.

Worried by ballooning current account deficit, the finance minister hinted at making gold shipments more expensive, saying it was under consideration, but did not elaborate on the type of measures. India has a 4 percent import duty on gold.

The RBI also recommended restrictions on value and volumes on importing banks and agencies.

Silver fell the most in more than four months. The March delivery contract on the MCX fell to Rs 56,841, its lowest since August 31. It was 2.96 percent lower at Rs 56,917 per kg as of 3:15 p.m.