Friday, April 26, 2013

(BN) Gold Buyers Throng Indian Stores for Second Week on Rally (1)


Gold Buyers Throng Indian Stores for Second Week on Rally (1)
2013-04-26 00:43:29.482 GMT

(Updates prices in sixth paragraph. For more on gold bear
market, see EXT5)

By Swansy Afonso
April 26 (Bloomberg) -- Gold consumers in India, the
world's biggest importer, thronged jewelry stores across the
country for a second week on speculation that bullion may extend
a rally after the biggest plunge in three decades.
"We waited for sometime to see if prices will fall more
but when we saw them moving up again, we decided it's time,"
said Sripal Jain, a 77-year-old silver dealer who came with his
younger brother, daughter and daughter-in-law to buy gold
necklaces at Mumbai's Zaveri Bazaar. "We don't have any wedding
or occasion coming up. The rates fell, so we decided to buy."
Bullion slumped 14 percent in two days, reaching the lowest
price in two years on April 16, triggering a frenzy among coin
and jewelry buyers from the U.S. to India, China and Australia.
The surge in demand has helped prices rally 11 percent since
April 16, and jewelers in India are paying premiums of as much
as $10 an ounce to secure supplies, according to the Bombay
Bullion Association.
"Everyone is thinking that they will miss the bus if they
don't buy now as prices have started moving up," said Ramesh
Pahlajani, partner at Mumbai-based Bherumal Shamandas Jewellers.
"Demand has been very good since last week."
Gold will rally to $1,800 an ounce by December as
skepticism over the global recovery increases demand,
billionaire Indian jeweler T.S. Kalyanaraman said on April 19.
The metal hasn't traded at that level since November 2011.
Prices may climb to $1,550 within six months on physical and
investment demand, according to Mark Pervan, global head of
commodity strategy at Australia & New Zealand Banking Group Ltd.

Gold Shortage

Spot gold rose 0.4 percent to $1,473.40 an ounce at 8:37
a.m. in Singapore today. Bullion has lost 12 percent this year
and is 5.6 percent below the April 11 close of $1,561.45 an
ounce that preceded the 14 percent slump in two sessions through
April 15, the worst since 1983.
The rush to buy has led to a shortage in India and jewelers
are paying premium of as much as $10 an ounce compared with $2
just 10 days earlier, said Bipin Jain, owner of Vimalson
Jewellers and a vice president of the bullion association.
"Three days ago there were queues to buy coins and bars,"
Jain said from his shop in Zaveri Bazaar, the largest bullion
market in the country. "Demand has slowed a bit from then but
buying will remain strong till Akshaya Tritiya."

Festivals, Weddings

The Akshaya Tritiya festival on May 13 is considered by
India's more than 900 million Hindus as the traditional day to
buy precious metals. Gold is bought during festivals and
marriages in India as part of the bridal trousseau or gifted in
the form of jewelry by relatives. The main festival season runs
from August to October followed by the wedding season from
November to December and from late March through early May.
"My sister-in-law is getting married and I have advanced
buying because of the recent price fall," said 33-year-old
costume designer Praveena Saleja, as she examined a 350,000-
rupee ($6,460) necklace studded with gems. "Prices will rise
again. Nowadays the designs are more trendier so I can pair them
with western outfits as well as Indian."
Saleja said she considered gold as a long-term investment
and was not deterred by the price slump.
Morgan Stanley said this week the peak in the price "has
now passed," while Goldman Sachs Group Inc. said April 23 it
exited a bet on lower prices while saying bullion may fall even
more. The declines in prices are attracting retail investors,
while billionaire John Paulson has stuck with his view that the
metal will climb as a hedge against inflation.

UBS Sales

"Some bullion dealers are asking buyers of coins and bars
to lock-in price today and come two days later as they do not
have much inventories," said Dharmesh Parekh, a partner at R.V.
Jewellers in Mumbai.
Nationwide daily sales of jewelry, coins and bars may be
about 4 metric tons, compared with normal levels of about 2 tons
to 2.5 tons, Rajesh Mehta, chairman of Rajesh Exports Ltd., said
yesterday. UBS AG said April 23 that physical-gold flows to
India approached the highest since 2008, while Standard
Chartered Plc said shipments last week were 20 percent above a
previous record.
"Demand has been extraordinary in the past 15 days and
sales this April have been much better than last year," Kamal
Gupta, chairman of P.P. Jewellers Ltd., said by phone from
Delhi. "Demand may slow from now on as prices have started to

For Related News and Information:
Investor Jim Rogers May Buy Gold If Prices Drop to $1,300
Gold Rout for Central Banks Buying Most Since 1964: Commodities
Paulson's Gold Bet Declines Almost $1 Billion: Chart of the Day
Top Commodity Stories: CTOP <GO>
Top Stories:TOP<GO>

--Editors: Thomas Kutty Abraham, Vipin V. Nair

To contact the reporter on this story:
Swansy Afonso in Mumbai at +91-22-6120-3648 or

To contact the editor responsible for this story:
James Poole at +65-6212-1551 or



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