Indian Physical Gold Still Strong

According to a report by the Economic Times, physical demand is still strong in advance of the harvest season. Premiums are going up because of supply limitations.

"We have good demand from the Southern states as harvest festival is due next week," said a dealer with a state-run bullion importing bank....

Farmers in India harvest their rabi crop, the second in the year, and sell their produce in the market, leaving more disposable income, that finds its way to gold and other saving instruments....

"Traders are coming in at regular intervals to buy. I sold 45 kgs at 1,367-1,371 (an ounce)," said another dealer with a state-run, bullion-importing bank.

Again, a weakening rupee helped limit the decline for Indian holders.