Indian Gold Demand Holding Up

According to a Reuters India report, gold demand from traders is still strong.

India gold traders continued to book deals on Tuesday afternoon as international prices stayed steady while the rupee strengthened making the dollar-quoted asset cheaper, dealers said.

Most of the deals are at $1,180 an ounce and sales are averaging 200 kgs daily in the past one week, said a dealer with a Mumbai-based state-run, bullion-dealing bank, whose imports rose by 90 percent on month to 3.8 tonnes in July....

"Prices below $1,180 are attractive for Indian buyers," said another dealer with a private bank in Mumbai.

That number is up slightly from the $1,175 of one to two weeks ago, likely because of a strengthening rupee.


Speaking of Indian demand, Edel Tully said in a note that physical demand has been fairly high.

"...the presence of very decent physical demand emits positive sentiment. Its persistence indicates that gold is trading more in line with its fundamentals," Edel Tully, precious metals strategist at UBS, a large supplier to India, said in the note.

UBS's five day moving average of sales to India was the highest since late Nov 2008, she added....

In fact, demand has risen to the point of making an upwards revision to the July import figures possible.