Gold demand in India, the world's biggest consumer, remained healthy on Wednesday as consumers were buying for key festival despite a percent rise that pushed up local prices to the highest level in nearly three weeks, dealers said.
* The most-active gold for December delivery on the Multi Commodity Exchange (MCX) was 0.89% higher at Rs 26,900 per 10 grams.
* The contract earlier hit a high of Rs 26,955, the highest level for the near-month contract since Sept 23.
* "Jewellers were active. Retail demand is there for jewellery along with coins and small bars," said a dealer with a Mumbai-based private bank trading the bullion.
* Gold demand is likely to gain pace and peak with Diwali and Dhanteras festivals slated later in the month. Weddings also take place during this period.
* "Demand is also higher as gold prices, which saw correction recently, may rise sharply again as gold has emerged as a safe heaven due to European debt crisis," said Murukesh Kumar, an analyst at JRG Wealth Management.
* International spot gold prices rose 1% on Wednesday as the euro climbed to a three-week high against the dollar, and after the Slovak parliament's rejection of a plan to expand the bloc's rescue fund stoked concerns over the euro zone debt crisis.
* The rupee, which plays an important role in determining the landed cost of the dollar-quoted yellow metal, shrugged off a sluggish start and nosed higher as a more than 1% rise in domestic equities helped raise hopes for foreign fund inflows.
