Mumbai: Indian gold eased on Tuesday, after rising for a couple of sessions in line with global markets, though physical demand remained muted ahead of a key gold buying festival amid lower supplies.

India, the world’s biggest buyer of the metal, will celebrate Akshaya Tritiya next week, the second-biggest gold buying festival after Dhanteras. Weddings have also started and will continue until July.

At 3.04 pm (0934 GMT), the actively traded gold for June delivery on the Multi Commodity Exchange (MCX) was 0.54% lower at Rs26,950 ($500) per 10 grams, after gaining more than 1% in the previous two sessions.

A stronger rupee kept the upside in prices limited. The rupee plays an important role in determining the landed cost of the dollar-quoted yellow metal.

Global gold eased, losing its shine as an alternative investment after stock markets rallied on hopes of a steady US recovery.

“Demand has slowed and even traders are cautious ahead of announcement by the RBI (Reserve Bank of India)... There is a shortfall in supply due to demand from China, Turkey, U.A.E," said Prithviraj Kothari, director with RSBL Bullions, a wholesaler in Mumbai.

Premiums charged on London prices were at $7-8 an ounce on Tuesday.

The RBI could restrict the import of gold on consignment basis by banks only to meet the genuine needs of exporters of gold jewellery in late May, governor D. Subbarao said in the monetary policy statement on 3 May.

Silver for July delivery on the MCX was 1.21% lower at Rs44,620 per kilogram.