Indian Gold Bullion Sales Up 161% to May – UBS
Festival season could push gold bullion prices higher...
THE GOLD rush in India – the world's largest consumer of Gold Bullion – continues unabated, writes Shivom Seth for MineWeb.
Physical demand for the gold remains high despite the spike in Gold Prices, wealth management firm UBS has said in a note, adding that gold sales to India saw a 23% jump from the start of the year to July.
As compared to the first seven months of last year, demand was rather robust – physical Gold Bullion sales soared 76% in May as compared to sales in April and a thumping 161% from a year ago, UBS said.
Though soaring Gold Bullion prices have been making Indians hesitant about Buying Gold, traders said the festival period – which commences in August – will ensure that more Indians buy the precious metal during an auspicious time.
Bullion retailer Shantilal Makwana said even a slight selloff in either gold or silver ensures physical buying. "Many small-time investors have deferred buying due to firm international and local prices. But, with prices leveling off even a slight bit, customers have started trickling in,'' he said.
The country's robust appetite for precious metals tends to pick up during the month of August, when a busy festival season kicks off with Raksha Bandhan, which is a festival celebrating the bond of protection between siblings in India.
In a ceremony that involves the tying of a sacred thread by a sister on her brother's wrist, a gold pendant or ring is now a must-have. The thread is meant to symbolize the sister's love and prayers for her brother's well-being, and the brother's lifelong vow to protect her.
As retailer Makwana said: "In most traditional households too, the sacred thread has given way to a small gold chain or bracelet. Not only does the festival ensure a massive demand for gold, many customers also buy gold jewelry or small items to gift their siblings during this time.''
India still dominates the gold jewelry market, buying 206.2 metric tonnes in the first quarter as compared to China which bought 142.9 metric tonnes. Traders insist that India's gold imports are set to spurt sharply in August, with imports set to rise three fold.
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