India Gold Extends Losses; Jewellers Seek Bigger Falls

Gold in India extended losses on Monday afternoon, following similar trend overseas, although a weaker rupee kept the downside limited, dealers said.

* At 2:09 p.m., the most-active gold for October delivery on the Multi Commodity Exchange (MCX) was 0.49 percent lower at 28,014 rupees per 10 grams.

* Global gold fell more than 1 percent on Monday but bargain hunters could cushion the fall, while escalating worries about Europe's debt crisis sent bullion priced in the euro to a record high.

* Fears about a Greek default rose after senior politicians in German Chancellor Angela Merkel's centre-right coalition started talking openly about it following the surprise departure of German's top official at the European Central Bank last week.

* The rupee weakened to its lowest in more than a year after government data showed industrial output in July rose a lower-than-expected 3.3 percent from a year earlier.

* The rupee plays an important role in determining the landed cost of the yellow metal, which is quoted in dollars.

* Physical players were on the sidelines awaiting bigger price falls to stock up ahead of a series of festivals in September and October.

* Buying is not much as rupee gone down sharply, hitting bullion dealer's costs, said a dealer with a private-run bullion importing bank.

* India is the biggest consumer of bullion followed by China. Wedding and festival demand is expected to gain pace and peak in October and November before tapering off in December.