Wednesday, 9th February 2005 (3368 views)

Demand for gold in India is rising, according to traders.

The country has seen a dip in gold prices, leading to delays in supplies, with delivery times up from the normal two days to over a week.

Some agencies have raised their premiums on world prices in order to cash in on the demand and one foreign bank reports that it has been selling seven or eight tonnes of gold a week, compared with the usual two to three tonnes, according to Reuters news agency. A dealer at the bank said it was struggling to cope with demand for the precious metal.

India is the world's largest market for gold and Bombay traders are reporting that importers have raised the premium to more than 85 cents per ounce on world prices, up from 55 cents.

The increased demand for gold is down to a 12 per cent fall in domestic prices, coupled with a 3.5 per cent appreciation in the rupee's value against the dollar in the past 3 months.

 

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