India's gold recovered from its lowest level in a month tracking overseas markets, though a strong rupee kept the upside in prices limited, but physical buying retreated after a slight pick-up in the previous session. The most-active gold for April delivery on the Multi Commodity Exchange was trading 0.33 percent higher at 20,672 rupees per 10 grams, after hitting a high of 20,690 rupees.
The contract recovered from a one-month low of 20,469 struck in the previous session, a level last seen on February 16. Overseas gold regained strength after falling to a one-month low in the previous session, but declines in ETF holdings to their lowest in 10 months suggested that speculators could still sell bullion to raise liquidity if equities reversed gains.
The Indian rupee pared early gains due to dollar demand from oil and gold importers but Asian currency and domestic share strength supported the local unit. The high-demand wedding season is underway in India, the world's largest consumer of the yellow metal. India's gold imports in October-December rose 30 percent to 265 tonnes.
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