Mumbai: Indian gold fell on Wednesday to its lowest level in more than a month as it tracked overseas leads, triggering light physical buying from traders who sought to stock up for the upcoming festivals amid lower imports estimates.

The most-active gold for August delivery on the Multi Commodity Exchange (MCX) was trading 0.55 percent lower at 29,265 rupees per 10 grams, after hitting a low of 29,234 rupees, a level last seen on June 8.

"Some buying is going on, but volume wise it is still less," said a dealer with a private bank importing bullion in Mumbai.

A series of festivals will start in India, the world's biggest consumer in 2011, in August and continue until December.

Traders would also eye the progress of the monsoon rains, which have been scant so far. Rural areas, which contribute to 60 percent of the gold demand, depend on monsoon rains for better farm productivity, yields and profits.

Gold imports could pick up in the second half of this year if prices ease, but annual volumes will still fall 30 percent after a tax hike that could crimp demand.

Silver too edged lower following the yellow metal to hit the lowest level in a week.

Silver for July delivery was 0.22 percent lower at 52,530 rupees per kg, after hitting a low of 52,456 rupees, a level last seen on July 5.

(Agencies)

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