Thursday, April 21, 2011

Indian Physical Gold Demand, Surprisingly, Jumps

According to a Reuters report webbed by the Economic Times, demand for physical gold jumped despite prices staying above $1,500.
"We are surprised at the number of deals (in gold) from morning. Traders' sentiment is (that) gold will follow silver now and go to an upper level," said a dealer with a state-run bullion dealing bank.

"Since silver is up 3 percent, but gold has just gained not even 1 percent, and it will play a catch-up," said the dealer.

Myself, I think there's another reason. Wholesalers and jewelers refrained from buying gold as it went up, content to draw down their inventory acquired at lower prices, and they're now stuck. The Akshaya Tritiya festival is coming up...

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