India bought some gold after cash prices slipped to their weakest in two months on Monday, raising hopes the world's largest consumer could be looking for more during the wedding season, dealers said. Gold's fall to a low of $873.45 an ounce, a drop of more than 2 percent from late New York levels, also lifted premiums for gold bars to 10 cents in Hong Kong from zero last week but physical demand was limited due to a national holiday in China. Cash gold was trading at $877.50 an ounce by 0740 GMT, down $15. It has fallen more than 13 percent since rising to an 11-month high above $1,000 in February. "We are definitely looking at much lower gold prices now and I agree that the higher stock markets and talk of IMF gold sales have placed a bit of pressure on gold," said Adrian Koh, analyst at Phillip Futures in Singapore. A surge in equity markets, driven by hopes the worst may be over for the U.S. economy, prompted some investors to ditch gold and buy shares. Planned International Monetary Fund gold sales of 403 tonnes of its 3,217 tonnes stocks also put pressure on gold. "The markets should initially react negatively to IMF sales, but think they will try to limit the effect of their gold sales on the markets by spreading out their selling," said Koh, who pegs the downside at $850 -- a level last seen in December. Gold bars were on par with spot London prices in Singapore, unchanged from last week, but dealers bullion could trade at a premium next week if buying from India persisted. . "Buying interest from India has started to emerge although the amount is not huge. I would say they are buying 100 kg. India has been quiet for a long time," said a physical dealers in Singapore.

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