"Volumes are very thin, I must have done only 20 kgs from morning," said a official with a state-run bullion dealing bank.
How strong demand was, is indicated by a Reuters report which describes overseas supplier shortages caused as a result of the buying spree.
[A] sharp drop in prices as a result of weak US inflation numbers triggered buying, taking sellers by surprise.The report mentions inventory levels are normally low this time of year, as monsoon season typically means low demand.
“A couple of them are now taking seven days to supply gold, this problem exists with some of them, so we prefer to buy from those who will deliver us promptly,” said a official with a state-run bank dealing in bullion.
Indian gold demand is set to pick-up for the festivals, starting with Raksha Bandhan on 24 August, and extending till Dhanteras in November, the single-biggest gold buying day.
“There was less demand in May and June, but due to a price fall in July demand rebounded, creating supply constraints,” said another official from the state-run bank, which imported 40 tonnes of gold in the last fiscal year....
It's an open question whether that demand was unintended channel-stuffing - i.e., demand taken away from coming weeks because bargains were realized. If so, then demand in forthcoming weeks will be weaker than it otherwise would have been.