October 24, 2008 / 11:13 AM / 11 years ago

India gold demand rises as price fall sharply

A woman touches a gold necklace at a jewellery store during Karva Chauth festival in Allahabad in this October 17, 2008 file photo. India's gold demand rose on Friday as retail buyers rushed into the market to cash in on a sharp fall in prices, dealers said. REUTERS/Jitendra Prakash

MUMBAI (Reuters) - India’s gold demand rose on Friday as retail buyers rushed into the market to cash in on a sharp fall in prices, dealers said.

“Prices have broken the pshycological level of 12,000 rupees...demand has improved significantly ahead of Diwali and Dhanteras,” said Ashwin Choksi, partner at Jamnadas M. Choksi Jewellers.

The benchmark December contract on MCX fell more than 300 rupees per 10 grams on Friday tracking weak overseas markets.

It has lost more than 1,500 rupees so far in October.

Overseas gold extended losses and fell 4 percent to touch its weakest level since September 2007.

If the prices fall below 10,000 rupees, it will be difficult to meet the demand, said a dealer with a large private bank.

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