MUMBAI, June 29 (Reuters) - Indian gold prices extended losses on Friday, hitting its lowest level in nearly two weeks, weighed by a firm rupee, triggering bargain hunting from physical traders as price levels were attractive. Supply of recycled gold slowed. * At 0848 GMT, the most-active gold for August delivery on the Multi Commodity Exchange (MCX) was 0.17 percent lower at 29,602 rupees per 10 grams, after hitting a low of 29,583 rupees, a level last seen on June 11. * Traders in India are waiting for monsoon rains to pick up, which is vital to farm productivity and profits. Rural areas contribute to about 60 percent of gold imports. * "There was demand yesterday evening because of correction. If prices are maintained at these level, we can see some buying," said Ketan Shroff, director with Pushpak Bullion. * There could be a pick up in imports in the second half of the year, if record prices ease but annual volumes will still fall about 30 percent after a tax hike, which could crimp demand until 2014, the Bombay Bullion Association head said. * India's crucial monsoon rains were again below average last week and failed to cover as much of the country as they should have, the weather office said. * Silver, an industrial metal, following positive trend in copper. * Silver for July delivery on the MCX was 0.68 percent higher at 52,108 rupees per kg. At 1:15 p.m., following were the prices in rupees quoted by Punjab National Bank in the spot market : Friday Thursday ========================================== Gold .999/10 grams 29,725 30,145 Silver .999/kg 51,647 52,212 At 1:54 p.m., following were the prices in rupees on the Multi Commodity Exchange of India Ltd <0#MAU:>: Contract Current price Net change ============================================= Aug gold 29,614 -38 July silver 52,117 +361

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