Strength of rupee helps drive sales
San Francisco, CA -- (SBWIRE) -- 10/09/2012 -- Demand for gold in India and China has increased as people get ready for seasonal celebrations and weddings.
In late September, a wave of buying in India was prompted by a fall in gold prices and growing strength of the rupee. The benchmark price of the precious metal fell to 31,281 rupees for 10 grams Sept. 24 while India’s currency reached a 4 ½-month peak.
Demand can be met if the price stays less than 32,000 rupees, a dealer at a Mumbai bank told Reuters. “The buying interest is much higher than last week, mostly because the rupee has appreciated substantially,” the dealer said.
The Hindu festival of lights takes place in November, marking the high point of the season of festivals and weddings, in which gold plays a traditional role.
In China, National Day falls at the start of October, and that weeklong holiday usually brings a surge in jewelry sales. Dealers reported buying in Hong Kong and a mix of sales and purchases in Singapore.
“The amount of buying is higher than a month ago but still not much,” Ronald Leung, a dealer at China’s Lee Cheong Gold Dealers, told Reuters.
“People might be a little reluctant to spend on luxury items because of an apparent slowdown in economic growth and worries about a change in Chinese leadership,” he said. He added, “There is a lot of uncertainty on the policy side, and we will probably see a clear picture in October,” Leung said.
In the first half of the year, demand for gold jewelry in China edged up compared with a year earlier, the World Gold Council said. But demand in the second quarter was down 9% from a year earlier.
Dealers said gold bar premiums in Hong Kong and Singapore changed little.
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