Light at the End of the Tunnel - India Buying Again

Source:

"Demand has been so much in the last couple of days" said Suresh Hundia, quoted by wire service Bloomberg, "that banks and other importers have run out of supplies.'' Hundia is president of the Bombay Bullion Association which represents 230 trading companies. "If the price keeps falling, there's no reason why people won't continue to buy.''

One of the factors which may well have helped bring the gold price down from its peak levels has been lack of demand from the world's leading gold importer, India. But now there is growing evidence that demand there is beginning to pick up again as jewellers and gold traders start buying to replenish stocks ahead of the wedding and festival seasons, and to take advantage of the lowest prices seen since December last year.

"Demand has been so much in the last couple of days" said Suresh Hundia, quoted by wire service Bloomberg, "that banks and other importers have run out of supplies.'' Hundia is president of the Bombay Bullion Association which represents 230 trading companies. "If the price keeps falling, there's no reason why people won't continue to buy.''

While we are still a couple of months away from the main wedding season which traditionally starts in October and from major festivals like Diwali - the Festival of Light - a five-day festival centred around the main Diwali day which falls on October 28 this year, gold inventories had sunk to low points, dampened by the high metal price and the feeling that the high levels would not last. As gold falls to near $800, buyers are coming back into the market as suggested by Hundia...

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