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Indians step up gold buying as prices for the precious metal fall to five-year low

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Indians step up gold buying as prices for the precious metal fall to five-year low

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Gold prices fell to a five-year low earlier this week. Massive selling on the Shanghai Gold Exchange helped to drive down prices by four percent. China and India are the world’s top gold buyers and the subcontinent accounts for more than a fifth of global demand.

At one of New Delhi’s leading jewellery markets traders have seen a modest rise in demand.

“Ever since the gold prices have fallen there has been an increase of nearly 20-25 percent in our business. It is only because the gold prices have come down,” explained Praveen Goel,managing director of the Sunar Jewel House.

Gold edged up from the five year low on Thursday but the modest gains suggest investors are still hovering in the market.

Many Indian jewellers sent texts to their clients encouraging them to buy gold and offering to cut the cost of making it into jewellery.

“Gold prices have come down, so I think that this is the right time to buy. I have come to buy gold as an investment for the future,” said one shopper.

Many believe the price could fall further one reason being the expectations of higher interest rates in the US. That will boost the dollar but make non-interest assets like gold less appealing.