Indian Gold Buying Restrained Despite Rout

The sub-$1,070 level has been mentioned as a bargain point by Indian gold dealers, but the buying activity turned out to be restrained according to an Economic Times report:

India's gold buying continued on Friday afternoon, with limited quantities changing hands as prices hit fresh three-month low, dealers said....

Demand has slowly picked up from late Thursday evening, dealers said.

One of them, quoted in the article, said that most of the buying he transacted was due to earlier-placed automatic orders. As far as fresh orders are concerned, buyers are holding back somewhat right now.

Given yesterday's rout, I can't really blame them.


Moving back to North America, holdings in the SPDR Gold Shares Trust dropped again yesterday for the second day in a row. From Wednesday's 1110.34 tons, holdings shrunk to 1104.55 tons for a loss of 5.79 tons. For the first time since mid-January, a decline has been met with liquidation by the Trust.

I can't say whether this is a sign of capitulation or whether it's the harbinger of a new decline. It is, however, something for gold watchers to mull over. It does show that the Trust's holdings are subject to price swings on the downside too.