Indian festival season boosts gold sales

Indian festival season boosts gold sales

Indian jewellers have sold 50 tonnes of gold in the last 20 days as the festival season reaches its peak.
Posted: Friday , 24 Oct 2008

NEW DELHI (Reuters) -

Indian jewellers have sold more than 50 tonnes of gold in the last 20 days, the peak festival season, two-thirds more than in the same period last year, the All India Gems and Jewellery Trade Federation said on Friday.

Gold sales in India surge ahead of the Hindu festivals of Dhanteras and Diwali being celebrated next week.

The data from the trade body was based on a survey of 1,400 retailers across 217 cities in India.

"This increase in demand can be attributed to consumers' belief of gold being the only safe investment in the current global market scenario," the trade body said in a statement.

It said the recent decline in gold prices had lifted sales.

Spot gold fell on Friday to $680.80 an ounce, a new 13-month low, before recovering to trade at $693.50/696.00 at 1123 GMT.

"We expect a buoyant Dhanteras this year. It is clearly seen that there is a strong demand for gold in the market due to its strong investment value." said Ashok Minawala, Chairman, All India Gems & Jewellery Trade Federation.

India imported around 65 to 70 tonnes of gold in September, according to the Bombay Bullion Association.

India buys 700 to 800 tonnes of gold annually. (Reporting by Biman Mukherji, editing by Anthony Barker)