India's local gold demand remained slack on Thursday as wedding season buyers awaited price declines after the yellow metal breached 13,000-rupee-mark late last week, dealers said.
"Again, there is no demand due to disparity in prices between bank gold and local gold," said a dealer with a state-run bank in Delhi, adding stocks have piled-up with banks due to lack of demand.
Traders and dealers said domestic gold demand had picked up after prices fell to around $800 an ounce on Jan. 15.
Gold futures on the Multi Commodity Exchange (MCX) reversed early losses to trade higher as a stronger crude enhanced the yellow metal's appeal as a hedge against inflation.
At 2:02 p.m, the benchmark gold February contract MAUG9 traded 56 rupees higher at 13,516 rupees per 10 grams.
Oil rose to $44 a barrel on Thursday after jumping nearly 7 percent a day ago, buoyed by growing expectations that OPEC's supply cuts may help balance a market still facing the spectre of weakening demand. [O/R]
A Mumbai-based scrap gold buyer said his supplies have risen after gold hit peaks, further reducing demand for bars.
"Scrap gold has started coming in since two days and we are now getting 4-5 kgs of gold everyday," said Jitendra Kantilal, partner at Jugraj Kantilal & Co. in Mumbai's Zaveri Bazaar.
Gold traders and dealers are still hopeful that price correction would result in revival in demand.
"Everybody is looking for prices to fall below $800 levels and 12,500 (rupees) levels," the dealer added.
