India gold demand turned slack on Friday after its biggest rally in five weeks deterred buyers from taking positions, traders said. "The demand is nil... it may come in if prices fall to around $850 levels," said Satish Bansal, director of MD Overseas, a Delhi-based bullion importer. The benchmark April contract MAUJ9 traded at 15,520 rupees per 10 grams at 2:04 p.m., near its previous day's high of 15,460 rupees. The contract rose 4.5 percent on Thursday, the biggest gain in a day since the 5.3 percent rise on Feb. 17. "Only if prices decline to 14,000 rupees, buyers would be interested," said Haresh Acharya, head of bullion desk with Parker Agrochem in Ahmedabad. There were a lot of imports until November when prices ruled relatively low and traders are still holding some of that stock, Bansal said.. "Traders have old stock to feed the market," he said, adding that there will be no fresh imports until stocks are exhausted. India's gold imports have slowed to a trickle after it imported 34 tonnes in November last year. Local gold was available cheaper than bank gold by about 300 rupees per 10 grams, signifying profit-taking by investors and also weak demand, Bansal added.

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