MUMBAI (Reuters) - Demand for gold in India, the world's biggest consumer of the precious metal, dropped on Friday as local prices rose tracking overseas markets and on a weak rupee.
* The key June contract was 0.87 percent up at 27,149 rupees per 10 gram on the Multi Commodity Exchange (MCX) at 3:40 p.m., after hitting a one-week low of 26,365 rupees on Wednesday.
* "Demand is very price-sensitive. The general perception among jewellers is prices will come down. That's why whenever prices go above 27,000 rupees, demand is slowing," said a Mumbai-based dealer with a private bullion importing bank.
* "Jewellers bought a lot of gold last month when prices fell below 26,000 rupees. Now, they are interested in only bargain-buying," the dealer said.
* Indians celebrate Akshaya Tritiya in the third week of May, a time considered auspicious to buy gold, while the current wedding season continues until July.
* The rupee, which plays an important role in determining the landed cost of dollar quoted yellow metal, fell on Friday.
* In the overseas market, gold rose as a cut in interest rates by the European Central Bank and U.S. Federal Reserve's decision to stick to its stimulus programme burnished bullion's appeal as a hedge against inflation.
* Silver for May delivery on the MCX was 1.10 percent higher at 45,031 rupees per kg.
(Reporting by Rajendra Jadhav; Editing by Subhranshu Sahu)
