September 14, 2012 / 8:07 AM / 7 years ago

India gold demand jumps as jewellers buy at record price

MUMBAI, Sept 14 (Reuters) - Gold demand in India, the
world's biggest consumer, rose sharply on Friday despite a
record high price as jewellers and investors scaled up purchases
expecting prices to climb further during the festive season.
    * India celebrates Ganesh festival next week, which will be
followed by Dussehra in October and Diwali in November. Buying
gold during festivals is considered auspicious in the country.
    * Spot gold price in India hit a record high of 32,558
Indian rupees per 10 grams on Friday, compared to previous
session's close of 32,173 rupees.
    * "Buyers were waiting for a correction in prices for a long
period. Now they think the correction is unlikely as the U.S.
Federal Reserve announced stimulus," said a Mumbai based dealer
with a state-run bank importing the yellow metal.
    "Some buyers even think price may cross 35,000 rupees."
    * Spot gold overseas rose to a six-month high on Friday,
extending the previous session's 2-percent gain, after the
Federal Reserve launched an aggressive economic stimulus program
that could add to the risk of inflation and strengthen bullion's
appeal. 
    * "Jewellers and jewellery exporters were keeping lower
inventory. They were postponing purchases, hoping prices will
drop from record level," said a Mumbai based dealer with a
private bank.
    "Now jewellers are buying at record high price since
festival season is just around the corner. They can't wait
further."
    * Investment demand, which plunged 51 percent in the June
quarter to 56.5 tonnes, was also improving due to the price
rally, dealers said.
    * The most-traded gold for October delivery was 0.2
percent lower at 32,261 rupees per 10 grams, after hitting a
record high of 32,421 rupees late on Thursday.
    * A rise in rupee, which determines the landed cost of
dollar quoted metal, weighed on sentiments, dealers said.
    
    * Following were the prices in rupees at 1:15 p.m., quoted
by HDFC Bank in the spot market :
                           Friday      Thursday      
    =============================================
    Gold .999/10 grams    32,485         32,173  
    Silver .999/kg        66,685         64,240
    
    At 1:28 p.m., following were the prices in rupees on the
Multi Commodity Exchange of India Ltd <0#MAU:>:
       Contract       Current price     Net change 
    =================================================
      Oct gold          32,261              -65   
      Dec silver        65,125              -167

 (Reporting by Rajendra Jadhav; Editing by Anand Basu)
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