Indian Demand Keeping Gold Markets Alive

Source:

The Indian wedding season, when gold is often presented as a gift at Hindu marriages, will last until the end of May. The Akshaya Tritiya festival on May 7 also spurred demand from jewellery makers.

Purchases from India, the world's largest gold consumer, have kept the physical market alive during the wedding season, but wild swings in bullion prices crimped demand in other parts of Asia.

The Indian wedding season, when gold is often presented as a gift at Hindu marriages, will last until the end of May. The Akshaya Tritiya festival on May 7 also spurred demand from jewellery makers.

"The coming festivals and the marriage season in India will most likely result in additional demand creeping into the market which could evade any major crash in gold from now on," said Pradeep Unni, an analyst at Vision Commodities Services in Dubai.

"Although there could be a marginal drop in prices in the coming sessions, it is unlikely to threaten the overall bull trend in gold as long at its stays above $885."

Gold roared to a lifetime high of $1,030.80 an ounce on March 17 but then tumbled to a two-month low of $872.90 in early April in a broad commodities sell-off. It has bounced since then and stood around $928 an ounce on Tuesday.

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