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Gold prices soar; demand subdued

Gold prices soar; demand subdued
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First Published: Mon, Jun 01 2009. 02 03 PM IST
Updated: Mon, Jun 01 2009. 02 03 PM IST
Mumbai: India’s domestic gold demand remained subdued as traders awaited a correction in prices which rose to their highest level since 13 May, tailing overseas markets, dealers said.
The most active August contract was up 0.32% at Rs14,932 per 10 grams at 2:00 pm, after having gained 2.5% in the previous four sessions.
Overseas gold, which guides the domestic market, hit a three-month high above $980 per ounce, buoyed by a weak dollar, while investors kept an eye on inflationary pressures in the wake of stimulus spending by governments.
“The volumes have dried up even though we are in the midst of wedding season,” said a dealer with a state-run bank in Mumbai.
“Most of the traders who had bought in recent weeks are finding it difficult to dispose off the inventory,” added the dealer. Dealers said gold demand had receded after having picked up in the first two weeks in May, following better-than-expected Akshaya Tritiya sales, an auspicious day to buy gold, as traders replenished stocks for wedding demand.
A drop in prices could activate the domestic market, dealers said.
“I have some advance orders in the range of $930-940 (an ounce),” said Pinakin Vyas, chief manager-treasury with IndusInd Bank.
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First Published: Mon, Jun 01 2009. 02 03 PM IST
More Topics: Gold | Bullion | Commodity | Markets | India |