It may be a bit too early to start your holiday shopping quite yet, but over in India, the pre-festival shopping spree has already begun. Gold prices were boosted to 5-week highs Tuesday as consumers in India rushed to jewelry stores for Dhanteras, which kicks off the Hindu festival of Diwali, the festival of lights.
Happy Diwali to gold investors indeed.
According to the Wall Street Journal:
“The mood among customers has been very positive. There is a lot of bottled-up demand as the price of gold this time has been running at a comfortable rate,” said Rahul Gupta, director of P.P. Jewelers, a leading Indian jewelry chain.”
Jewelers said demand is expected to be higher this evening when office-goers make their festival purchases.
As Bloomberg points out, while demand for gold in India has been suppressed compared to last year, the may finally be making a turn around:
Jewelers in India, which represented 25 percent of global bullion purchases last year, are betting demand will be rekindled by four straight quarterly declines in domestic prices, the longest slump since 2004.
“The appetite for gold among physical buyers in India seems to have increased,” said Howie Lee, an investment analyst in Singapore for Phillip Futures Pte. “India’s attachment to gold is unlikely to break. This tradition has lasted for centuries. It’s a symbol of wealth or a form of investment, and the precious metal is deeply rooted in worship and culture.”
(Photo courtesy of wsj.com)