Gold prices were higher on Wednesday on foreign cues and a weaker rupee, reducing purchases to a trickle, but dealers were hopeful the
wedding season, which lasts till the end of June, would keep a modest demand alive.
"Demand is very dismal... only Indian rupee is supporting some physical demand," said a dealer with a large private bank in Mumbai.
Foreign gold markets that influence local prices edged up as the dollar gave up gains versus the euro and stock markets opened lower, spooked by news Bank of America may need extra capital.
Additionally, the rupee traded weaker against the dollar, weighed down by a fall in the stock markets, making the import-driven gold more expensive.
Traders said they were watching the foreign markets for a fall below $900 an ounce.
"Only if prices stay below $900, can demand pick up," said Ajit Shinde, director of Magna Projects, a large trader in Kolkata.
Though festival-related buying is over for the first half of the year, weddings would keep demand on till the monsoon starts in June.
After that, there would be a lull in purchases till an inauspicious phase, which continues through September, is over.
