India's Gold Demand Recovering
Gold imports to India bounced sharply in August...
IS INDIA'S GOLD DEMAND headed for a sharp recovery? asks Commodity Online in Mumbai.
The world's hungriest gold market seems to be picking up after the collapse of late 2008 and early 2009, as gold importers witnessed a near-three-fold jump during August at 21.8 tonnes as compared to the previous month.
Rising Gold Investment demand coincided with the onset of the traditional festival and marriage seasons. Imports of the precious metal were just 7.8 tonnes in July this year.
However, in August 2008 the imports were much higher at 98 tonnes just before recession was officially declared and the domestic demand slipped.
According to local analysts, end-consumers are still waiting for prices to come down from the Rs 15,000 per 10 grams level, with press reports suggesting a further rise in prices ahead.
So Gold imports have been sluggish so far this year, falling to just 81.2 tonnes during January-August, compared to 261 tonnes in the same period last year.
In January, only 1.8 tonnes of gold was imported followed by no imports during February and March due to lack of demand, caused by high prices following the global recessionary pressures.
Earlier, gold imports had touched 20 tonnes in April, on account of Akshaya Thritiya, a festival considered auspicious for Buying Gold.
Now gold imports are likely to go up for the next 2-3 months as Indian people invest their money in the yellow metal for better returns.
Further ahead? By the end of the year the trend is likely to decline again. The rise in imports can be attributed to jewelers wanting to stock up before the beginning of Diwali demand, peaking with that "festival of lights" in October.
For now though, with a bullish trend in Gold Prices worldwide, there is also a rise in Indian investor demand at higher levels, giving rise to fresh imports of the yellow metal.
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