India gold demand weakened on Wednesday in the middle of the festive season,reversing last week’s trend,as international prices powered to a new record high,dealers said.
“These are all psychological levels as demand is just not coming up. There was demand last week,” said Pinakin Vyas,chief manager-treasury with IndusInd Bank. “Traders are still cautious and closely following the price movements.”
“Demand is totally zero,traders can’t digest these 1,040 levels,” said a dealer with a private bullion-dealing bank in Mumbai.
International gold hit a record high on the spot and futures markets,with dollar weakness continuing to support sentiment by attracting fresh investment in the precious metal,traders said.
Dealers said the underlying demand is strong,with traders seeking lower prices to stock for festive season.
“We have orders lined up in the range of $1,025-1,030 an ounce,” said another dealer with a private bank.
India,which accounts for more than 20 per cent of the global demand for gold jewellery,is in the midst of a festival season which peaks with Diwali on Oct. 17,when weddings usually take place,pushing up the demand for jewellery.
India’s gold imports in September provisionally fell 30 per cent,the smallest year-on-year decline in five months,as steady prices and the festival season attracted more buyers.