Gold extends gains to near peak; buying absent

Gold extended gains on Wednesday afternoon to near its peak following firm overseas markets, and a weaker rupee, which made the dollar-quoted yellow metal expensive, analysts said.

Gold extended gains on Wednesday afternoon to near its peak following firm overseas markets, and a weaker rupee, which made the dollar-quoted yellow metal expensive, analysts said.

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* The most-active gold for October delivery on the Multi Commodity Exchange (MCX) was trading 0.64% higher at 26,392 rupees per 10 grams at 1.47 pm, after nearing its previous record at 26,400 rupees.

* The contract had struck its peak at 26,457 rupees last week

* Global gold held steady near a record high after a Franco-German summit failed to convince investors that the euro zone debt crisis would be solved effectively, supporting safe-haven demand for bullion.

* The rupee, which was weaker on euro's retreat and oil demand, plays an important role in determining the landed cost of the dollar-quoted yellow metal.

* Physical buying stayed weak as prices neared peak.

* "Buying is not very encouraging. Indian buyers are still at sidelines," said a dealer with a private bank in Mumbai, which imports bullion.

* Gold demand from India, the world's biggest buyer of the yellow metal, will gain pace in coming weeks on the back of wedding and festival demand.

Gold .999/10 grams: Wednesday - 26,650 Tuesday - 26,363
Silver .999/kg: Wednesday - 61,875 Tuesday - 60,863