Wednesday, May 4, 2011

Indian Physical Demand Strong Pre-Festival

According to a Reuters report webbed by the Economic Times, flat prices triggered "frantic" buying from traders ahead of the Akshaya Tritiya festival on Friday.
"I must have sold 700-800 kgs from Monday. Since the prices are flat today, they are still on buying side," said a dealer with a state-run bullion importing bank in Mumbai.
Silver is also being bought in very large amounts.


That reported amount was huge, and raises a question: did traders buy in such quantities because retail demand is expected to be much greater than originally anticipated, or because dealers drew down inventory too much? Given what I've seen, I think the latter - but it could be both.

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