Weddings, price fall lift gold demand

By Biman Mukherji

NEW DELHI (Reuters) - The easing of gold prices from near 28-year highs is tempting gold buyers back to jewellery shops during the ongoing marriage season, after they kept their moneybags zipped during the peak Hindu festival period.

Spot gold on Friday rose to $797.70/798.50 an ounce, but has dropped nearly 5 percent since hitting a two-week high of $836.70 on Monday, just short of the 28-year high of $845.40 hit earlier this month.

"We are seeing some demand emerging for gold," said Suresh Hundia, president of the Bombay Bullion Association. "It had almost disappeared during the festival season."

India's peak gold buying usually occurs during the festival season which begins end-August and culminates in November, but many made just token purchases this year because of the high prices.

India's marriage season usually starts right after the festival of lights, Diwali, in November and ends in February-March.

It also marks a busy period for jewellers as brides are usually gifted gold jewellery, which are later locked away as savings and not sold unless in distress.

"There was hesitation for a short while in buying gold jewellery during the Diwali season. Now we are seeing that changing," said Rajeev Popley, director of the Popley & Sons chain of jewellery stores.

Other jewellers said demand was yet to peak.