Gold prices are on an uptrend, rising for the third straight week on global cues and buying by investors. On Saturday, the yellow metal gained Rs 30 to end at Rs 29,880 per 10 gm in the Delhi bullion market.
Silver prices also firmed up to end at Rs 43,450 per kg.
However, gold is selling at a discount to official prices even as the buying is largely confined to investors rather than jewellery makers. The discount of $1 per ounce is in sharp contrast to a premium of about $3 per ounce last week, according to a Reuters report.
"The market is losing momentum due to the price rise. Prices need to come down below 28,500 rupees (per ounce) to boost demand," the agency quoted a Mumbai-based dealer with a private bank as saying.
India is the second-largest consumer of gold in the world, after China. However, gold imports have been declining over the past few months, as can be seen from the monthly data published by the country's commerce and industry ministry.
The demand for gold jewellery in India dropped to a record low of 662 tonnes in calendar year (CY) 2016 due to demonetisation, high prices and protests by traders in the initial months. The fall was 27 percent, while in neighbouring China, the drop in gold jewellery demand was 17 percent, according to the latest report released by the World Gold Council (WGC).
Gold stocks ended with gains on the last trading day (Friday) of the week. Titan rose 1.71 percent to Rs 431, PC Jeweller gained 1.73 percent to close at Rs 380, Tribhovandas Bhimji Zaveri (TBZ) shares ended 1.62 percent higher at Rs 69.
The Indian rupee closed six paise higher at 67.01 to the US dollar on Friday.