Monday, April 25, 2011

Indian Physical Gold Demand Picks Up Despite Record Prices

According to a Reuters report webbed by the Economic Times, Indian traders aren't letting record prices deter them from buying a fair anount of gold in anticipation of the Akshaya Tritya gold-buying festival.
"I booked for 100 kg from morning at $1,538.5 (an ounce). Both my Delhi and Mumbai centres are active," said a dealer with a state-run bank in Mumbai dealing in bullion. "I have advance orders at $1,517."
After Akshaya Tritya comes the wedding season, which is expected to add to demand.

I have a hunch that the dearth of demand while gold rose was the result of traders, jewelers and stockists drawing down the inventories that they acquired at bargain prices. Now that those inventories are low, they have to go into the gold market to keep up with demand. It looks like this year's Akshaya Tritya is going to see a lot of gold buying at the retial leovel.

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