India gold demand low, discounts continue

MUMBAI (Reuters) - India's gold market saw little demand for the yellow metal on Tuesday that kept local prices discounted by around 100 rupees per 10 grams over what banks and trade houses quoted, dealers said.

"There is no demand and gold is being recycled," said Chanda Venkatesh, proprietor of Chanda Anjaiah Parameshwar, a large bullion wholesale company in Hyderabad.

Venkatesh said he was not sourcing gold from the banks which comprises fresh imports and is therefore priced in dollars, as local sellers are "continuously selling."

A large importer in New Delhi, Mayank Khemka of Khemka International Pvt. Ltd., also said scrap and bar sales from the local market were meeting the little demand from consumers, with imported stocks barely being consumed.

Khemka said the price in the New Delhi market was at 10,650 rupees per 10 grams, while Venkatesh said it was at 10,700 rupees in his region.

Bank dealers in Mumbai said there was barely any demand from clients and only a fall to $800 an ounce could interest them again.

Gold prices overseas were up on bargain hunting spurred by a struggling U.S. dollar and analysts said the metal was getting closer to its 28-year high hit early November at $845.40 an ounce.

With India's festivals now over, consumers are not interested in buying much gold at prices above 10,000 rupees per 10 grams. But weddings in the next few months necessitate purchases that could keep a low-scale buying on, dealers say.

Following was the price of .995 gold in the spot market in rupees per 10 grams at 1:00 p.m. :

Bank Tuesday Monday

Scotia 10,771 10,800

Following are gold prices in rupees per 10 grams on the Multi Commodity Exchange of India Ltd. at 2:12 p.m. :

Contract Current price Net change

 

Dec 10,487 -53

Feb 10,560 -43