Indian gold demand 'likely to rise'

Traders in India are anticipating rising gold prices at the end of 2008 thanks to a good monsoon which has been forecasted by weather experts.

Kharif harvesting will begin at the end of September and it is thought that the possible bumper crop could leave farmers with more disposable income to spend on gold, Resource Investor reports.

Jewelers could expect to see an increase in sales to the tune of 35 per cent if the rains are as good as Met Office reports predict, since the harvest coincides with the wedding season.

Demand usually increases by around 40 per cent during this period as families participate in gold buying for traditional reasons.

In time, this may mean gold prices could rise due to supply and demand fundamentals - GFMS figures show that, while gold demand increased by five per cent in 2007, supply dipped by 0.4 per cent to an 11-year low.

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