MUMBAI/BENGALURU, Nov 9 (Reuters) – Demand for physical gold gathered steam during a key festival week, shrugging off a recent downtrend going into the traditional busy wedding season, while other major Asian hubs saw limited activity.
India, the second biggest bullion consumer after China, celebrated the Dhanteras and Diwali festivals this week, when buying gold is considered auspicious.
“We were initially sceptical about Diwali demand but it jumped this week, despite higher prices,” said Harshad Ajmera, the proprietor of JJ Gold House, a wholesaler in the eastern Indian city of Kolkata.
Local gold prices have eased about 3 percent after touching their highest level in five years in late October. The price rise gave confidence to consumers that gold will provide better returns than other asset classes in coming years and prompted them to increase purchases, said Saurabh Gadgil, managing director of PNG Jewellers.
Dealers in India were offering discounts of up to $3 an ounce, the lowest in six weeks, over official domestic prices compared with the $7 discounts last week. The domestic price includes a 10 percent import tax.
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