Indian Gold Buying Tails Off Due To Price Rise

According to a Reuters report webbed by the Economic Times, buyers fell away because of higher prices:

"There are hardly any buyers today. Yesterday I covered for more than 125 kgs at $1,323.80 (an ounce)," said a dealer with a state-run bullion importing bank in Mumbai....

Dealers said the supply constraints could ease, after raising premiums to more than $2 per ounce over London prices, a level last seen in Oct. 2008.

"After the Chinese new year (Feb. 3), probably the supply issue could get solved," said another dealer with a state-run bullion dealing bank.

Thanks to robust demand earlier, imports of gold into India likely rose in January. The median forecast from a Reuters straw poll of 10 industry experts was for a 6.6% rise to 36.25 tonnes.


Update: The provisional number for Indian imports came in significantly higher than forecast: 40 tonnes, for an 18% gain.