Gold Holds Near 3-Week High as India Seen Buying Before Festivalby and
Indian consumers typically purchase gold for Diwali festival
Gold priced in Indian rupees down about 8 percent since July
Gold held near a three-week high on speculation the Diwali festival in India, the world’s second-largest bullion buyer, will boost demand.
While physical purchases in India have been weak this year, buying may pick up before the festival of lights on Sunday and the wedding season. Prices have also become more attractive, tumbling about 8 percent in rupees from a July high. Dhanteras, which takes place on Oct. 28, is seen as the most auspicious day in the year to buy gold in Hindu tradition.
“There are signs that buying is picking up in India,” Alasdair Macleod, head of research at bullion services company GoldMoney Inc., said by phone from Exeter, England. “Priced in rupees, gold is quite cheap, making it attractive for families seeking to invest.”
Gold for immediate delivery was little changed at $1,274.53 an ounce by 11:04 a.m. in London, according to Bloomberg generic pricing shows. Prices touched $1,276.78 on Tuesday, the highest since Oct. 5, though are still heading for a monthly drop.
The metal’s 25 percent first-half rally has since sputtered on expectations that the Federal Reserve is about to raise interest rates, curbing demand for assets which don’t pay a yield. Bullion will retreat to $1,100 by later next year, according to Singapore-based Oversea-Chinese Banking Corp., the most-accurate bullion forecaster in the third quarter.
Central banks in Kazakhstan and Russia increased their gold reserves last month, according to International Monetary Fund data. Holdings in gold-backed exchange-traded funds climbed 0.2 percent to 2,046.9 metric tons as of Tuesday, data compiled by Bloomberg show.
In other precious metals:
- Silver was little changed at $17.7628 an ounce.
- Platinum added 0.1 to $966.86 an ounce, while palladium rose 0.4 percent.