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Demand for gold not picking up due to high prices

business Updated: Jun 14, 2009 11:21 IST

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India's demand for gold has failed to pick up as high prices of the commodity has kept away a significant number of buyers, a senior economist said.

"Buyers have stayed on the sidelines mainly due to high prices (of gold). The first marriage season of the year has come to an end and there are no signs of demand for gold picking up," National Commodity & Derivatives Exchange Limited (NCDEX) Economist, Manasee S Gokhale, said in a report here.

Last week, gold prices opened the week at Rs 14,644 per 10 grams initially and moved higher to Rs 14,720 levels before closing at Rs 14,466.

India's gold and silver imports have been badly hit due to lower demand. India's gold imports fell by a drastic 45 per cent at 450 tonnes in 2008. There has been only a trickle of gold imports up to April 2009, reportedly only 32 tonnes so far.

The main culprit has been the high prices of gold that has kept away a significant number of buyers. Most of the retail buyers have shied away from the market as gold at Rs 14,500 per 10 grams seems to be too high. The years first marriage season has come and gone without much pomp or activity and the dismal imports are proof enough to show how price sensitive Indian consumers are, Gokhale said.