High Gold Prices Result In Muted Demand Across India
September 16th, 2010 - 7:18 pm ICT by Pen Men At Work
September 16, 2010 (Pen Men at Work): India, the largest consumer of gold witnessed muted buying as the prices hovered around a record high on Thursday. Most of the consumers in India have decided to postpone purchasing the precious metal until the gold prices reach a more affordable level.
The prices soared to a record high on Wednesday when it touched Rs. 19,257 for 10 gms. The Multi Commodity Exchange of India saw a climb down of 0.14% the next day and it settled at Rs. 19,112 per 10gms.
The real reason behind the fall is the RBI’s decision for a rate hike which resulted in the appreciation of the rupee said a dealer associated with a Multi national bank. While the high price of gold hasn’t completely managed to deter the demand, it seems to have cooled of appreciably despite the impending festive season in India. The demand for gold witnesses an all time high during the months of October-November in India when it is considered to be auspicious for buying gold.
The price of gold in the International market remained steady and within the normal rate on Thursday due to the softening of the US Dollar as well as the improved economy.
According to the dealers, the upsurge in markets will level off and the demand is bound to resurface if the gold prices stay within Rs. 19,200 to Rs. 19,400. There is the likelihood of a restocking at the dealer level as well.
A poll by Reuters have estimated India’s gold imports to be 504.5 tonnes this year which shows an elevation of 24.5 tonnes from last year.
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