Gold demand in India picks up

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Gold demand in India picks up ahead of festival season mumbai — Physical gold demand in second-biggest consumer India saw an uptick this week ahead of a key festival, although higher prices weighed on sentiment across the broader Asian markets.

Next week Indians will be celebrating the annual festival of Akshaya Tritiya, when buying gold is considered auspicious.

“Many potential buyers were on the sidelines. They started buying after prices jumped,” said a Mumbai-based dealer with a private gold importing bank.

In the Indian market, gold futures were trading at around 31,041 rupees per 10 grammes. Prices hit 31,562 on Wednesday, their highest since August 2016.

“Akshay Tritiya is just around the corner but footfalls are still significantly lower than usual,” said Fatechand Ranka, a jeweller based at Pune, in western state of Maharashtra, adding “it is forcing industry players to give discounts on jewellery-making charges.” Dealers in India were offering a discount of up to $2 an ounce over official domestic prices this week, down from $3 last week. The domestic price includes a 10 per cent import tax.

India’s gold imports in March halved from a year ago to 52.5 tonnes as a rally in local prices to 16-month high slashed demand, provisional data from precious metals consultancy GFMS and bank dealers showed.

Spot gold was up 0.4 per cent at $1,340.86 per ounce at 0948 GMT, and was set for a second weekly gain. Prices had touched a 11-week high of $1,365.23 on Wednesday.