Mumbai: India’s retail gold traders continued to replenish stocks on Wednesday as prices stayed near the previous day’s one-week low, but below normal monsoons could dampen demand in the short-term, traders and dealers said.
“I sold around 50 kgs yesterday (Tuesday) and have entered into deals today (Wednesday) as well,” said wholesale trader Harshad Ajmera, proprietor of Kolkata-based JJ Gold House.
“Traders (retail) are filling in their stocks after the wedding season,” said Ajmera, adding they would hunt for more bargains if prices correct.
The most-active August contract was steady at Rs14,442 per 10 grams at 2:05pm, near its previous day’s low when a strong dollar overseas spurred selling.
Traders said below normal monsoons in India could dampen gold sales, which is already reeling under pressure due to a slowing economy and high prices.
“Certainly gold sales would get affected due to the monsoon factor,” said a dealer with a state-run bank in Mumbai, adding sales might be down by 20-30% on year.
The July-September monsoon, crucial to agriculture and rural incomes, has been delayed and is forecast to be at 93 percent of the long-term average. Demand for gold in India hinges on a good monsoon, which boosts farm output and rural incomes.