India, the world's largest gold consumer, is likely to resume import of the precious metal this week after a long lull, as global prices have fallen sharply amid signs the United States is unlikely to attack Iraq immediately.

But large-scale buying is expected to start only when prices fall further even though India is well into its wedding season, when demand for gold jewellery rises, traders said on Monday.

Spot gold had slipped to $347 an ounce in early European trade from more than $380 nearly two weeks ago, but traders said they were looking to make bulk purchases at around $320 an ounce.

"Importers have waited so long for a comfortable price level. Many of them feel that they should wait for some more time for prices to fall further and stabilise," said Narendra Singh Rathore, a gold trader based in the northwestern city of Jaipur, a major bullion trading centre.

India imports an average of 13,000 gold bars (of 116.64 grams each) a day, and these overseas purchases constitute about 70 per cent of the country's total consumption. Local prices therefore closely track global trends.

Traders said many consumers, who had suspended jewellery purchases due to firm prices, will slowly start buying as the marriage season peaks in the next two weeks, prompting jewellers to replenish stocks.