Demand for gold in India is expected to be strong in the current quarter because of relatively lower prices and monsoon revival, said Philip Olden, managing director and chief marketing officer of World Gold Council.
“A good monsoon in India translates a lot of money from the rural economy into gold sales,” Olden said on the sidelines of the 25th India International Jewellery Show inaugurated on Thursday. Also, fall in gold prices in the last few weeks has been driving up consumption, Olden said.
Over the past two weeks, the price of October gold contract on MCX has fallen about 10 per cent from over Rs 13,500.
At 2:40 pm, the contract was at Rs 12,173 per 10 gm, up Rs 62 from Wednesday’s close.
Olden expects import of the yellow metal to be strong in the third quarter compared with the second and first quarters this year. A key reason for the decline in gold prices is the weakness in oil in the last few days.
Gold and crude usually move in tandem as both are used as hedges against the US dollar.
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Ahmedabad-based Parkar Agro, one of the largest private sector gold importers in the country, has bought 1.5 tonne of gold from overseas early this week to cash in on the decrease in the prices.
India is one of the largest importer of gold. Many buyers, however, have turned reluctant to make large purchases due to the recent volatility in the prices.
Standard gold and ornaments shed Rs 10 each at Rs 12,250 and Rs 12,100 per 10 gm respectively. Sovereign held steady at Rs 10,525 per piece of eight gram. Silver ready in restricted activity ruled flat at Rs 23,650 per kg but weekly-based delivery declined by Rs 55 to Rs 23,395 per kg.