Gold traders in India, the world's biggest buyer of bullion, stayed on the sidelines as the spot prices extended its gains after the rupee dropped to its weakest level in more than a month, analysts said.
HDFC Bank, one of the designated banks to import bullion, quoted gold in the spot market at Rs 28,135 per 10 grams, up 0.39% on day.
The most-active gold for April delivery on the Multi Commodity Exchange (MCX) was 0.10% higher at Rs 28,051 per 10 grams, recovering 1.16% from the previous week's low of Rs 27,730.
"Demand is still zero as the rupee depreciated 1%," said Haresh Acharya, head of bullion desk, Parker Bullion in Ahmedabad. Demand could re-emerge if the prices fall to Rs 27,500.
The rupee dropped to its weakest level in more than a month due to dollar demand from importers and a fall in local shares.
The rupee plays an important role in determining the landed cost of the dollar-quoted yellow metal.
Wedding season is currently on in India, which normally consumes about 900 tonne of the yellow metal.
Silver prices edged lower. Silver for March delivery on the MCX was 0.68% lower at Rs 57,692 per kg.
