Gold traders in India continued to pay near-record premiums on Tuesday due to scarce stocks amid rising demand in the peak wedding season.
To ease its trade deficit, India has made it more expensive to bring in gold, the biggest non-essential import item, by setting the import duty at a record high 10 percent.
It has also tied the quantity of imports to exports, making it necessary for importing agencies to fulfil export orders before sending any bullion for local consumption.
"There is no business at all as material is not available," said Haresh Acharya, head of bullion desk, Parker Bullion.
Premiums stayed steady at around $130 an ounce this week, said Bachhraj Bamalwa, director at the All India Gems and Jewellery Trade Federation.
The World Gold Council (WGC) cut its forecast for Indian gold demand earlier this month to 900 tonnes from the earlier 1,000 tonnes, predicting that the country could also lose its place as the world's biggest consumer of bullion to China.
The actively traded gold for February delivery on the Multi Commodity Exchange (MCX) was 0.06 percent higher at 28,846 rupees ($460) per 10 grams.
Silver for March delivery on the MCX was 0.73 percent lower at 44,148 rupees per kg.