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 selloff.
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 per cent 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 per cent 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?"…
India spent a record $15.2 billion on gold imports in April-May 2013, with gold bars selling locally for more than $20 an ounce above the global spot price. That premium is now just around $1 an ounce.Bottom not yet in.
"Many Indian consumers are not buying, thinking there's still scope for downside in prices," said Daman Prakash Rathod, a director at Chennai-based wholesaler MNC Bullion.
Times of India
After China dumps gold, Indians in no mood to rescue the yellow metal
Reuters
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