Mumbai: India’s gold demand dried up on Tuesday, after moderate overnight sales that continued into the early part of the day, when the metal corrected to fall below $800 an ounce, dealers said.
“Demand was good yesterday evening and this morning... now clients are waiting for some more correction,” said a dealer in a large private bank in Mumbai.
Though the busiest part of the season has now ended, there is still an appetite in the market for weddings, the dealer said.
“Diwali was dull, but now some sort of buying should come in for marriages,” said Samir Shah, vice president at SJR Commodities & Consultants Pvt Ltd, a large bullion wholesaler.
The wholesale market could see good buying in the range of Rs9,500-10,000 per 10 grams, he said.
But if prices fail to fall below Rs10,000, a part of the demand for weddings may be met through scrap gold sales, Shah added.
Overseas gold was trading above $800 an ounce on bargain buying after falling by over 1% in early trade. Last Wednesday, gold saw its highest level in 28 years at $845.40 as credit market troubles and firm crude oil prompted investors to take positions in gold.
In the local market, the metal remained above the psychological Rs10,000 level, but was softer from its 18-month highs above 10,700 seen last Wednesday.
“If it stays like this, scrap sales will continue,” said Ashok Gupta, partner at Ganpati Traders in New Delhi.