Gold to shine more as wedding bells ring

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Mumbai, Nov 10: With marriage season beginning to kick-off and the decline in prices, gold is likely to glitter more than usual in the days ahead as traders feel that sales of gold may go up, sources said. Gold prices lost 17% in October, the biggest decline since February 1983, as the dollar climbed and reduced the appeal of the precious metal as an alternative investment.

“Demand for gold in the domestic market may grow over the next two months and overall sales may go up by as much as 15% to 25%,” a local dealer said. Traditionally, the demand for gold peaks across the country during November and December, two months filled with important festivals and considered an auspicious time for weddings. However, the import of gold declined to 44 tonne in October from 64 tonne in September. The total import may touch 400 tonne during the April-October 2008 period, sources said.

With the credit crisis having a direct impact on funding costs and causing the drying up of inter-bank credit lines, a few foreign banks have altogether stopped supplies of gold to Indian banks in a bid to reduce their exposure to Asian markets.