Monsoon to impact on India gold demand - Thursday 26th July 2007

Demand for gold in India was temporarily down on Thursday (July 26th) as prices increased, but this is not likely to have an effect on overall demand, Reuters reports.

Moderate sales were made the day before, with one dealer saying: "Demand was good yesterday, but it is nothing much today."

Mayank Khumka of Khemka International Pvt Ltd commented: "There might be a 10 to 15 days delay in the start of the busy season this year as the [Hindu] festivals are delayed, but that doesn't reduce the overall demand."

The busy season for gold in India will begin next month when people shop for precious metals for festivals and weddings.

Meanwhile, Mineweb notes that the monsoon has a significant effect on gold demand in India, as the quality of the harvest directly impacts local affluence and gold purchasing.

The Indian Meteorological Department said that rainfall over the country in June was 107 per cent of the average, but that this year's season would be 93 per cent of the long-term average.

"On the basis of a forecast good harvest, however, and all other things being equal, the gold market should be able to look forward to healthy purchases over the latter part of this year and into the early part of 2008," the website notes.
Goldbug, 26 Jul '07

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