MANILA/MUMBAI – Blame poor rains or a lack of weddings, but Indians, for whom gold is the investment of choice, aren’t rushing to buy bullion after this week’s sharp sell-off.
India and China are the world’s top gold buyers and, after massive selling on the Shanghai Gold Exchange on Monday helped drive down gold prices by 4 percent to a 5-year low, traders hoped demand would perk up in India, or elsewhere in Asia.
The last big slide in gold prices – a 13 percent drop in just two consecutive trading days in April 2013 – prompted weeks of long queues of Indians outside gold showrooms.
Not this time. India’s gold appetite – it accounts for more than a fifth of global demand – remains sluggish, with only modest local premiums to the global spot benchmark.
“That’s really a bearish sign, when the main consuming region remains on the sidelines after such a price drop to a multi-year low,” Commerzbank senior oil analyst Carsten Fritsch told the Reuters Global Gold Forum on Tuesday.
“Who’s going to buy gold if not the Asians?”
OUT OF WEDDING SEASON
As the gold price dropped on Monday to $1,088.05 an ounce, its lowest since March 2010, Indian jewellers sent text messages to clients encouraging them to buy gold and offering to cut by half the cost of making it into jewellery.
While the price slide sparked some interest, there has been no repeat of the 2013 buying frenzy. “This is not a festive or wedding season, so interest remains low,” said Kumar Jain, vice-president of the Mumbai Jewellers Association.
For the rest of this article, click here: http://in.reuters.com/article/2015/07/21/gold-india-demand-idINKCN0PV1LQ20150721