Gold demand elusive ahead of festivals

Gold demand elusive ahead of festivals

Mumbai: Gold demand remained elusive on Wednesday as prices stayed near their record highs, even as the biggest gold buying festival, Dhanteras, neared, dealers said.

“Overall demand is very low as the market is just moving one way," said Pinakin Vyas, chief manager-treasury IndusInd Bank.

“The marked difference during this Diwali is that people are not there this time for purchases compared to last year," said Vyas.

Gold futures on the Multi Commodity Exchange was 0.42% lower at Rs15,968 per 10 grams, within sight of their record high of 16,048, struck in late trade Tuesday.

A strong rupee, which makes the dollar-quoted asset cheaper, aided sentiment, they added.

The Indian rupee climbed to one-year highs buoyed by the dollar’s broad-based fall and a stronger start to the stock market that could trigger more capital inflows.

Dealers said a 5% fall in prices could revive sagging gold demand.

“They are waiting for a correction to happen to buy for festivals. A fall to Rs15,200 could just provide the trigger," said another dealer with a state-run bank in Mumbai.

India is in the midst of the festival season, with Dhanteras on Thursday and Diwali on Saturday, when gold buying picks up for auspicious reasons.

Dhanteras accounts for 15-20 tonnes of total gold sales, trade sources said.

India’s gold imports in September provisionally fell 30%, the smallest year-on-year decline in five months, as steady prices and the festival season attracted more buyers.