MUMBAI (Reuters) - Gold demand in India was moderate on Thursday on buying by some jewellers, taking advantage of a strong rupee, though hefty premium over London prices was prompting some to postpone purchases.
The most-active gold contract for December delivery was 0.64 percent higher at 30,250 rupees per 10 gram at 1.59 pm on the Multi Commodity Exchange (MCX).
"Supplies are not sufficient. Supplies coming through legal channels are very expensive. Buyers need to pay more than $100 (per ounce) premium over London prices," said a Mumbai-based dealer with a private bullion importing bank.
"Some jewellers are postponing purchases. They think premiums will come down in coming weeks once more people start imports."
Overseas gold extended gains into a second session on Thursday after Janet Yellen, likely the next chairwoman of the Federal Reserve, indicated the U.S. central bank would continue to support the economy through its stimulus measures.
India celebrated Dhanteras, the biggest gold buying festival, and Diwali earlier this month, when scarcity of the yellow metal and higher prices pushed consumers to buy silver and diamond jewellery.
Also Read
The wedding season is underway in the world's biggest consumer of gold.
The rupee rose on Thursday. A strong rupee makes imports of gold and silver cheaper.
China in this year is set to usurp India as the world's biggest gold consumer by a convincing margin as strict import rules introduced by New Delhi bite, forecasts from the World Gold Council showed on Thursday.
The industry body cut its outlook for Indian demand in 2013 to around 900 tonnes from the 1,000 tonnes predicted previously, while keeping its forecast for China unchanged at 1,000 tonnes.
The silver contract for December delivery was 0.93 percent higher at 47,110 rupees per kg on the MCX.
(Reporting by Rajendra Jadhav; Editing by Anand Basu)