MUMBAI (Reuters) - India's gold prices fell on Monday on the back of a stronger rupee, but buyers stayed away hoping for bigger falls even with the year's biggest festivals coming up this month, dealers said.
"People anticipate more falls... they are in a wait-and-watch mode," said a dealer in Shiv Sahai & Sons in Chennai.
Foreign gold, that guides the local market, rose amid a softer dollar and firm crude oil even as a global rescue plan for financial institutions kept the metal's safe-haven allure alive.
Gold generally has an inverse relation with the dollar as the two compete for funds. But gold tracks crude oil as the latter signals inflation that the metal negates.
Traders said consumers were eyeing falls below 13,000 rupees per 10 grams.
"If prices don't fall to around 12,500-12,700 rupees, Dhanteras sales may get spoilt," said Harshad Ajmera, proprietor of JJ Gold House in Kolkata.
Ajmera said gold sales for Dussera last week were down on year and Dhanteras and Diwali at the end of the month may remain damp too if prices stay firm.
In the local market, gold was available at a discount of around 275 rupees per 10 grams over the bank rates owing to high supplies available, Ajmera said.
