Thursday, October 15th 03:53 PM IST

Indian Gold demand may pick up as festival season approaches

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Physical gold demand in India has remained weak lately but is likely to improve with the approaching festive gold-buying holiday of Diwali less than a month away, said HSBC.

MUMBAI (Bullion Street): Physical gold demand in India has remained weak lately but is likely to improve with the approaching festive gold-buying holiday of Diwali less than a month away, said HSBC.

According to HSBC, gold’s discount in India was $7-11 an ounce below London prices, compared with a $6-8 discount a week earlier.

“Dealers that imported in early October have been taking advantage of the recent rally in gold prices and are selling at a steeper discount to global prices, according to local gold merchants,” said HSBC in a research note.

“Despite the current environment of sluggish demand, we expect physical buying to improve ahead of Diwali, which will be on 10 November in South India and 11 November in North India. Diwali is considered the most auspicious period for gold buying in India,” said analysts at HSBC.

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