India gold powered to another record high on Thursday helped by a weak dollar overseas, spurring scrap sales as consumers cashed in on the price surge, but weakness in the physical offtake continued, dealers said.

"There are 15-20 people lined outside my shop for scrap sales, and we expect around 50-60 of them to come in by evening," said Jitendra Kantilal, partner at Zaveri Bazaar-based Jugraj Kantilal & Co.

"Around 500-600 kgs of scrap (gold) must have landed in bazaar last week," Kantilal added.

Kantilal offered to buy scrap at 17,000 rupees per 10 grams.

The most-traded gold December contract on the Multi Commodity Exchange struck a fresh record of 16,884 rupees in the afternoon trade, erasing the morning high of 16,860 rupees.

However, spot demand continued to remain weak as traders were reluctant to place fresh orders in the middle of the weddings season, which will last till December.

"I haven't booked a single deal for local jewellers since morning," said a dealer with a state-run bullion dealing bank in Mumbai.

"There could be good domestic demand if prices go below 16,500 rupees (per 10 grams) or $1,080 an ounce," said the dealer.