MUMBAI RETURNS

MUMBAI (Reuters) - Record high gold prices in India have triggered a surge in recycling of the precious metal as consumers rush to cash in on their holdings, while imports have almost ground to a halt, traders and dealers said on Wednesday.

Gold on the Multi Commodity Exchange of India Ltd (MCX) hit a fresh high at 15,617 rupees ($313.6) per 10 grams, extending the previous day's gains on firm overseas markets and a weaker rupee against the dollar.

"There are lots of sellers... This time big lots are coming of 200-300 grams per person," said Jitendra Kantilal Jain, partner at Mumbai's Jugraj Kantilal & Co, which buys scrap gold for refining and repackaging as bars.

In the spot market, banks, the primary sellers of imported gold, quoted even higher, with Scotia Mocatta quoting at 15,700 rupees per 10 grams as it has to peg local prices to the foreign market.

The rupee's exchange rate impacts gold prices as most of the metal is imported in India and paid for in dollars.

MUMBAI (Reuters) - Record high gold prices in India have triggered a surge in recycling of the precious metal as consumers rush to cash in on their holdings, while imports have almost ground to a halt, traders and dealers said on Wednesday.

Gold on the Multi Commodity Exchange of India Ltd (MCX) hit a fresh high at 15,617 rupees ($313.6) per 10 grams, extending the previous day's gains on firm overseas markets and a weaker rupee against the dollar.

"There are lots of sellers... This time big lots are coming of 200-300 grams per person," said Jitendra Kantilal Jain, partner at Mumbai's Jugraj Kantilal & Co, which buys scrap gold for refining and repackaging as bars.

In the spot market, banks, the primary sellers of imported gold, quoted even higher, with Scotia Mocatta quoting at 15,700 rupees per 10 grams as it has to peg local prices to the foreign market.

The rupee's exchange rate impacts gold prices as most of the metal is imported in India and paid for in dollars.

In the overseas market gold was at $972.70 an ounce on Wednesday, close to its seven-month high hit a day ago at $973.20, with worries over a contracting U.S. economy and safe haven buying underpinning the metal.

Kantilal, whose gold business in the heart of Mumbai's Zaveri

Bazaar has been running for 40 years, said a queue of about 60 sellers, mostly women with their old jewellery, formed on Tuesday as the latest rally in prices began. 

verseas market gold was at $972.70 an ounce on Wednesday, close to its seven-month high hit a day ago at $973.20, with worries over a contracting U.S. economy and safe haven buying underpinning the metal.

Kantilal, whose gold business in the heart of Mumbai's Zaveri

Bazaar has been running for 40 years, said a queue of about 60 sellers, mostly women with their old jewellery, formed on Tuesday as the latest rally in prices began.