Gold steady near 3-week high, traders stay away

MUMBAI (Reuters) - Gold traders in India, the world's biggest buyer of bullion, took to the sidelines in the middle of the festival season as prices remained steady near their highest level in three weeks.

* The most active gold for October delivery on the Multi Commodity Exchange (MCX) was 0.05 percent higher at 30,198 rupees per 10 grams as support from higher overseas market was offset by a stronger rupee at home.

* Gold prices on Tuesday were steady near the previous day's high of 30,220 rupees, a level last seen on July 31.

* "Business is bad... some suppliers are selling gold at a discount of 1.5 percent," said Harshad Ajmera, proprietor of JJ Gold House in Kolkata. "There could be some business due to festivals," he added.

* The festival season is underway in India and will continue till November. Gold imports have already declined due to doubling of import duty, and the drought could further dent demand from rural areas.

* Rural areas, which depend on monsoon rains for agricultural yields and income, contribute about 60 percent of the country's demand.

* Silver edged higher to hit its highest level in a month due to overseas leads.

* Silver for September delivery on the MCX was 0.26 percent higher at 54,456 rupees per kg, after hitting a high of 54,488 rupees, a level last seen on June 21.

(Reporting by Siddesh Mayenkar; Editing by Anupama Dwivedi)

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