India Gold Rises Over 1 Pct; Demand Retreats.

MUMBAI: India gold tracked overseas uptrend and extended gains to rise more than a percent on Tuesday afternoon, pulling down retail demand ahead of the key festival season.

* A strong rupee, however, kept the upside limited. * At 1:5 8 p.m., the most-active gold for October delivery on the Multi Commodity Exchange (MCX) was 1.65 percent higher at 26,112 rupees per 10 grams. On Aug. 10, it had hit a record high of 26,457 rupees.

* Overseas gold rose 1 percent on Monday, as a drop in the dollar and sharp gains in crude oil and grains lifted bullion ahead of Tuesday's French-German meeting to discuss the euro debt crisis. . On Tuesday, international gold traded steady.

* The rupee plays an important role in determining the landed cost of the yellow metal, which is quoted in dollars.

* "Demand is not really good as of now due to affordability. There is not much of re-stocking happening at current levels," said a dealer with a private bank, which imports bullion.

* Gold demand from India, the world's biggest buyer of the yellow metal, will gain pace in coming weeks on the back of wedding and festival demand.

At 1:15 p.m., following were the prices in rupees being quoted by HDFC Bank in the spot market :

Tuesday Friday Gold .999/10 grams 26,285 26,018 Silver .999/kg 61,275 59,588

Source : economictimes.indiatimes.com