India gold festival buying retreats amid lack of supplies
India gold buying retreated on Thursday as prices recovered partly from their lowest level in nearly a week, as supply situation is expected to remain tight until next week, dealers said.
January 13, 2011 / 15:14 IST
India gold buying retreated on Thursday as prices recovered partly from their lowest level in nearly a week, as supply situation is expected to remain tight until next week, dealers said.
There had been a pick-up in demand in the past few sessions as traders took advantage of lower prices to stock for the harvest festival and upcoming wedding season, when demand for bullion goes up."Today, demand is poor, yesterday though there were a few deals at USD 1,380 (an ounce) keeping in mind Lohri celebrations in the north," said a dealer with a state-run bullion importing bank in Mumbai.The most-active February contract on the Multi Commodity Exchange (MCX) was trading 0.18% higher at Rs 20,437 per 10 grams, recovering from a near one week low of Rs 2,031.5 struck in the previous session.The world's biggest consumer of bullion celebrates the harvest festival with Lohri in the north on Thursday, and pongal in Tamil Nadu on Saturday.Dealers said they were unable to get timely supplies as refineries overseas were not operating in full capacity, which pushed premiums higher."We are unable to get supplies, so premiums have moved up on week to USD 1.40/1.80 (an ounce)," said another official with a state-run bullion dealing Mumbai-based bank."There was a huge pent-up demand from December, and again traders are generally keen to stock in the new year, but there has been a temporary supply shortage and we hope that it would get solved by next week," said a senior official with a foreign bank, which supplies precious metals to India. Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
