Indian Gold Buying Dormant, But So Is Selling

According to a report by the Economic Times, gold demand is muted after the metal fell from its recent record high.

A weaker rupee, which made the dollar-quoted asset expensive, also weighed on sentiment, they added. "Nothing much... buying is absolutely dull at the moment, even the rupee is not acting in support," said a dealer with a private bullion dealing bank in Mumbai....

Rural India, which accounts for 65 per cent of the total demand, divert their savings to buy seeds and fertlizers for their kharif crops, leading to limited demand for the metal during the sowing season. India has also been witnessing slackness in gold buying since the start of May as record high prices dented demand....

[But, "s]ellers are not there despite of prices reaching Rs 19,000... good scrap flow was seen last when prices were at Rs 18,000," said Jitendra Kantilal, partner with Jugraj Kantilal and co, a scrap dealer in Mumbai.

The fact that sellers are not anxious to take advantage of near-record prices is a good sign for the metal.