India gold neared its record high of 16,040 rupees on Monday keeping buyers away in the midst of the wedding season, while consumers exchanged old gold for new, traders said. "Currently, sales are down by 80-90 percent as compared with last year," said Harshad Ajmera, proprietor of a Kolkata-based JJ Gold House. Local gold is cheaper than bank gold by 500-600 rupees, Ajmera added. "There has been a continuous inflow of old gold, with no new buyers for bars," said Ajmera, adding "people are exchanging old gold for new for marriage purpose." The benchmark April gold was up 2.1 percent at 15,830 rupees per 10 grams at 1:35 p.m., after hitting a high of 15,968 rupees earlier on safe-haven purchases and a weak rupee. The contract had struck its all-time high of 16,040 rupees on Feb. 20. ICICI Bank quoted spot gold at 16,110 rupees per 10 grams compared with 15,689 on Friday. A weaker rupee makes the imported yellow metal expensive. The Indian rupee dropped to record lows on Monday as weak Asian stock markets heightened fears of capital outflows and analysts said it was likely to weaken more in the near term. "The demand has been very very poor," said Mayank Khemka, managing director of Khemka International, a Delhi-based wholesaler, adding "people are looking at levels below 14,000 to buy." Near-record prices have resulted in the inflow of huge scrap thereby restricting demand for new bars. India has not imported any gold so far in February as high prices dampened demand in the world's largest market and the outlook remains downbeat, the head of a leading trade body said on Friday.

Source