India gold buying resurfaces as prices steady near 2-wk low

(Reuters) - India gold buying resurfaced on Wednesday afternoon as prices steadied near their lowest level in two weeks offsetting a weaker rupee even as the wedding season drew to a close in the world's largest consumer of the yellow metal, dealers said.
"There is renewed enthusiasm in market after markets crashed by $40 yesterday, I booked deals for 200 kgs from yesterday evening from $1,417 and below," said a dealer with a state-run bank in Mumbai.
The most-active gold for February delivery on the Multi Commodity Exchange was trading 0.15 percent higher at 20,480 rupees per 10 grams at 1:27 p.m., drawing away from a two-week low of 20,423 rupees struck in the previous session, a level last seen on Dec. 23.
International spot gold steadied from a more than two percent fall in the previous session, as bargain hunting on the physical market lent support and helped offset a stronger dollar.
India's gold buying is expected to restart in mid-January, when harvest festivals are slated.
Traders were undeterred by a weaker rupee, which made the dollar-quoted yellow metal expensive.
The Indian rupee dropped to its lowest level in more than a week as the dollar climbed broadly against major currencies and Asian peers, while a shaky shares added to the downbeat mood.
India's central bank has allowed 7 more banks to import gold and silver, bankers and trade officials said on Monday, a move that will smoothen supply in the world's largest consumer of the metals.

http://in.reuters.com/article/idINIndia-53936420110105