Gold wholesalers and importers in India retreated on Tuesday despite the ongoing wedding season as the yellow metal gained for a third session to its highest in a week in line with global markets.
The wedding season in India, the world's biggest buyer of the metal, will continue until early January and gold is an important gift item at marriages.
"Buying is a little slow as people are waiting for a price correction," said Ketan Shroff, director, Penta Gold, a wholesaler in Mumbai.
The most-active gold for December delivery on the Multi Commodity Exchange (MCX) was up 0.34% at Rs 31,437 per 10 grams. It hit Rs 31,467 earlier, its highest since December 12. The contract gained 0.5% in the previous two sessions.
In the global markets, gold edged higher, hovering around a key resistance at $1,700 an ounce on Tuesday, as investors watched US lawmakers inch towards a deal to avert a fiscal disaster.
Investors also awaited direction from a flat rupee, which plays an important role in determining the landed cost of the dollar-quoted yellow metal.
Silver also extended gains on Tuesday, trading 0.78% higher at Rs 61,965 per kg.