(REUTERS) -- Gold demand in India, the world's top consumer of the metal, was moderate on Wednesday as some jewellers chose to restock despite a price rise, dealers said Wednesday.
At 4:35 p.m., the most-active February gold on the Multi Commodity Exchange was up 0.18 percent at 27,706 rupees per 10 grams, after rising 1 percent in the previous session.
Demand is moderate. Compared to last week, it has improved, but still, many potential buyers are waiting for a price correction, said Kapil Kumar Chokshi of Chokshi Arvind Jewellers in Mumbai.
International spot gold traded steady on Wednesday, retaining most of the previous session's strong gains on encouraging economic data from the United States and Europe, and rising concerns on Iran also helped support sentiment.
The Khar Mass period has been weighing on demand, dealers said. Khar Mass is a month in the Hindu calendar from Dec. 16 to Jan. 14 that is considered inauspicious for gold-buying and starting new ventures.
The rupee, which plays an important role in determining the landed cost of the dollar-quoted gold, rose to 53 to the dollar, up from 53.21/53.22 at the close on Tuesday, reflecting dollar sales by some foreign banks.
India has made hallmarking gold jewellery mandatory, a senior government minister said on Wednesday, a move that could boost demand in the world's biggest gold market by taking care of quality worries.
Gold imports by India plunged 56 percent to 125 tonnes in the fourth quarter of 2011, cutting full-year imports by 8.4 percent as record high prices and high interest rates hit demand, the head of India's leading bullion body said.