Gold jewelry
Gold jewelry in India Reuters

Indian investors of gold, the world's biggest consumers of bullion, remained on the sidelines even though traders offered discounts of up to $5 per ounce to global prices, with the demand outlook likely to be dull, players said.

Everybody is selling, there is a discount of $4-$5 in the local market ... still there is a liquidity crisis, inflation is still high, savings are not there, said Prithviraj Kothari, President of the Bombay Bullion Association.

HDFC Bank, a gold importer, was offering the product at Rs. 29,040 per 10 grams, about Rs. 200 higher than RiddhiSiddhi's, a local gold supplier. The rupee has been trading, recently, at record lows against the dollar.

However, in the domestic futures market, gold and silver rose more than a percent, tracking gains on global markets.

The most-active December delivery gold contract on the Multi Commodity Exchange (MCX) traded 1.05 percent higher at Rs. 28,707 per 10 grams, after hitting a high of Rs. 28,735. December silver was 1.33 percent higher at Rs. 55,052 per kg.