Gold buying in India remained subdued, with negligible stocks of the yellow metal bought before the tax hike, while consumers waited for a price correction below support levels.
The government plans to restrict gold buying by announcing more measures in addition to a 50 per cent hike in import duty to keep a lid on its bloating current account deficit.
Traders had accumulated stocks, when the finance minister hinted of a duty hike on January 2, and later raised the duty on January 21.
"Activity is happening, but not in a huge way after yesterday's rebound. Prices are holding the 30,000 rupees level and the market is expecting a correction below the support level, triggered by shift from gold to currencies and equities," said a dealer with a private bullion importing bank in Mumbai.
The actively traded gold contract for April delivery on the Multi Commodity Exchange (MCX) was 0.03 per cent lower Rs 30,771 per 10 grams.
A slightly stronger rupee weighed on prices of the yellow metal. The rupee plays an important role in determining the landed cost of the dollar-quoted yellow metal.
Silver contract for March delivery on the MCX was 0.21 per cent higher at Rs 58,543 per kg.
Copyright @ Thomson Reuters 2013
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