India gold demand slackens

Demand for gold in India has weakened following sturdier prices for the precious metal, Reuters reports.

Following a decline in the dollar, more people opted for gold as an attractive investment option and the gold price moved to more than 8,700 rupees per ten grams.

"Demand is light … it is going to be like this for the next few days," said Brijwasi Buillion & Jewellers Pvt Ltd's Lokesh Agarwal.

Mayank Khemka of Khemka International Pvt Ltd said that people would probably buy "if prices fall back to 8,600 rupees … Otherwise the whole of July will be dull".

Yesterday gold reached its highest level in almost two weeks following security concerns and a drop in the value of the dollar.

The yellow metal reached as high as $658.80 an ounce, following a three-month low of $638.90 recorded last week.

Terrorist actions and other global security concerns tend to drive the price of gold upwards as investors look for a secure investment option.