MUMBAI: India physical gold offtake edged up on Tuesday as a strong rupee weighed on prices, with traders continuing to stock up for festivals due later in the month, dealers said.
"A strong rupee has given some respite to traders, they are dealing in small quantities," said a dealer with a state-run bullion-dealing bank in Mumbai.
The most-traded December contract on the Multi Commodity Exchange was 0.16 percent lower at 15,634 rupees per 10 grams at 2:48 p.m., weighed by a strong rupee, which makes the dollar-quoted asset cheaper.
The Indian rupee further extended gains in afternoon session on Tuesday helped by the dollar's losses versus other majors and regional currencies while some paring of losses in local shares also helped.
Dealers said the keenly-watched $1,000 (an ounce) level was acting as a psychological barrier for physical players.
"They are all afraid of $1,000 level, major players (in the trade) are still silent," said another dealer with a state-run bank in Mumbai.
India, which accounts for more than 20 percent of the global demand for gold jewellery, is in the midst of a festival season which peaks with Diwali.
Weddings usually take place during the festive season, pushing up the demand for jewellery.
India's gold imports in September provisionally fell 30 percent, the smallest year-on-year decline in five months as steady prices and the festival season attracted more buyers.
