Gold Heading Towards All Time Highs On Festive Season Demand
Buying in gold is ahead before the festive season and that is why gold prices have risen considerably in last 2 weeks.
Physical gold demand in Asia improved modestly this week as consumers returned to the market ahead of upcoming festivals in India and China when demand is usually high. In India, the world’s second-biggest gold consumer, discounts narrowed as jewelers started buying for the festive season. Dealers were offering a discount of up to $52 an ounce over the global spot benchmark, down from up to $60 last week.
Gold strengthened for the sixth straight week and gathered further grounds to hit an almost six-year high of Rs 52,780 and ended at Rs 52,650 per 10 gram at the bullion market amid a pick-up in buying activity ahead of Diwali. Silver, however, lacked necessary buying support and shed some grounds. Bullion traders said persistent buying by ornament makers, triggered by the upcoming festive and wedding season lifted the gold prices to trade at an almost six-year high. India’s gold demand may rise in the second half of 2016 after falling to the lowest in seven years in the first half as monsoon rains spur rural demand during the peak festive season. Bullion prices in top consumer China were at a premium of$1.50 an ounce to the global benchmark, almost unchanged from last week, dealers said. Premiums in Hong Kong were about 10 cents an ounce from 20-60 cents previously.
Buying activity, driven by upcoming festivals, it surged to trade at a near six-year high and will continue to rise as per the experts. In contrast, silver ready after shuttling both ways on alternate bouts of buying and selling. Silver has been languishing since a lost time and prices have remained constantly in the lower 60s. However, silver too is in huge demand during the festive season in rural areas of India and experts believe that the prices will peak.
This news is however nothing new if you compare the trends of the last decade or so. Gold prices are known for surging as soon the Navaratri starts and by the time Diwali comes, gold has more often than not given investors some good returns. Make this Diwali a happy one amid pandemic and buy some gold this festive season.