Trade official reports "heavy rush to buy jewelry" as festival season heats up
A fall in
gold prices over the past few weeks and the beginning of the peak festival season have revived jewelry demand in India, industry executives said Thursday.
Consumer appetite for
gold in India has been weak since the beginning of this year as a higher import duty and a weak rupee kept local prices high.
India's
gold demand fell by more than a third during the first half of 2012 to 383.2 metric tons, forcing some jewelers to offer discounts and gifts to boost sales.
Local
gold prices have now fallen by around 5% from their all-time high in September to about 30,800 rupees ($575) per 10 grams, tracking weak global cues. Analysts say prices are unlikely to rise much from the current level due to increasing strength in the rupee.
"There was a heavy rush to buy jewelry yesterday due to Dussehra," said Kumar Jain, vice president of Mumbai Jewellers Association.
The demand has now almost doubled compared with July-August, though it is still lower than last year, he added.
India's peak festival season starts with Dussehra. The main Hindu festival, Diwali, will be celebrated on Nov. 13 this year.
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