High prices curb India gold demand in festival time

High prices curb India gold demand in festival time

Mumbai: India’s demand for gold was low in the wholesale market as prices strengthened above the psychological Rs10,000 per 10 grams, while a retailer said some buyers were purchasing lesser quantity than they had planned.

“I don’t have much orders here to watch (prices for)... just sitting idle," said one dealer in a large bullion bank.

“Last year at this time people were buying even though prices were rising... this time, they are waiting and watching."

Dealers said sharp rallies overseas, two days ahead of a key US interest rate decision, have kindled hopes of a correction.

“People would want 9,800-9,900 levels," the dealer in the large bullion bank said.

Another dealer in a private bank said moderate retail demand was likely being met through scrap sales and bullion sales by investors keen to book profits.

Overseas, gold rallied to its highest in nearly three decades as crude oil struck a record high on Middle East tensions.

The dollar slid to a record low against a basket of international currencies on expectations of a rate cut, adding to gold’s gains.

A retailer said there was no let up in the footfalls at his stores despite prices, with Karva Chauth festival on Monday and Diwali and Dhanteras coming up next week.

“Customers’ budgets get decided a few months in advance, so they are bound to feel the pinch," said Rajiv Popley, director at Popley & Sons, an upmarket jewellery chain in Mumbai.

Popley said he saw decreased quantities being purchased, and his company is offering schemes such as loans to pull in sales.

Following was the price of .995 gold in the spot market in rupees per 10 grams at 1:15 pm