India's Rising Gold Demand Stutters but Probably Temporarily
Source: Reuters (8/13/08)
India's gold demand paused on Wednesday as prices inched up tracking an overseas rebound, but dealers said many buyers waited for lower levels as retail demand had already set in.
"Today demand has halted, but there are plenty of orders placed in advance for $805-$810 an ounce levels," said Manoj Agarwal of Om Commodity Trading Co, a large wholesaler in Ahmedabad.
Foreign gold that guides the local market edged up after an eight-month low the previous day, as the dollar retreated from its highs against the euro, and crude oil prices steadied.
Gold generally moves in tandem with crude oil as the latter signals inflation, while the metal negates it. But the metal has an inverse relation with the dollar as the two compete for funds.
Dealers said supply problems continued to persist with a delay of up to one week for delivery after the heavy demand that started last week...
Raksha Bandhan festival on Saturday is expected to see high jewellery sales, particularly in north India, and would also mark the start of the busy season with more festivals to follow in the next few months.