Gold prices in India, the world's biggest buyer of bullion, hovered near a two-month high on Monday, keeping traders on the sidelines despite the key gold buying festival of Akshaya Tritiya on Tuesday, dealers said.
The most-active gold for June delivery on the Multi Commodity Exchange (MCX) edged 0.17% lower to 28,652 rupees per 10 grams, but stayed close to a level last seen late February, due to a weaker rupee.
"Sales are nil... there are no customers at shops. Otherwise sales for Akshaya Tritiya used to start two days in advance," said Harshad Ajmera, proprietor of JJ Gold House, a wholesaler in Kolkata.
India celebrates Akshaya Tritiya on Tuesday, the second most auspicious gold buying day after Dhanteras. The wedding season is also at its peak.
The rupee, which weakened on Monday, plays an important role in determining the landed cost of the dollar-quoted yellow metal.
Gold imports have come to an almost complete halt on high prices after a duty hike, although a three-week long strike to protest the increase was called off after the finance minister promised action early next month.
Silver on the MCX also fell 0.48% to 56,249 rupees per kg.
All eyes are on the Federal Open Market Committee meeting on Tuesday and Wednesday, as the Fed's attitude towards more monetary easing remains vital to gold's fortunes. Bank of Japan will meet on Friday, and is expected to ease again.
Copyright Thomson Reuters 2012
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