Domestic Traders Hopeful Of Rising Demand For Gold

New Delhi, October 27: | Updated: Oct 28 2002, 05:30am hrs
Contrary to the rising demand for gold in global markets, the gold demand in the country is currently at a very low key. The domestic demand is likely to improve marginally in this festive season centering Diwali, said MMTC precious metals marketing director Sanjiv Batra.

Speaking to FE, Mr Batra said in the previous year, 2001 the total demand for gold was assessed at about 800 tonne. This year it would be much less. He said in the the first six months of the current year the demand for gold had been much lower than the like period in the previous year. There are hopes that the coming Diwali season may boost the demand for gold, he said. Mr Batra said the global gold prices had increased to as high as $325 per troy ounce signifying a rising demand in the international market. In the previous year, the global prices for gold averaged around $275 per troy ounce. He said the weakening of US dollor and the Japanese currency yen have prompted people in many countries of the world to invest in gold. The situation in global stock market was also not good and this also induced people to invest in gold, he said. Mr Batra said that sensing the growing demand for gold in global market, the Bank of Scotland has already indicated that it would sell gold out of its stock. Mr Batra said that strangely the situation in India is totally different from that occurring in global market regarding the demandfor gold. May be the gold demand in the western world is prompted due to the fallout of the September 11, 2001 terrorist attack on WTC towers in US, he said and added that if this assessment is correct then more people in these countries will continue to invest in gold as the threat of US-Iraq war looms large. Analysing the Indian context, Mr Batra said that gold imports in the country has already fallen by by about 35 to 40 per cent in the current year. This is a clear indication that the demandfor goldi n the country has fallen. u

He said that as the imports have declined, the domestic traders and jewellers are depending much upon recycled gold for making new ornaments and fabrications. However, there are also indications of global prices falling marginally. In the last two days the global prices for gold fell from $ 320 per troy ounce to $ 314 per troy ounce. This may be a turning point for inducing more imports by India. But the demand situation also needs to improve in the country and this can be expected around the coming Diwali and the following marriage season, he said.