Record-high gold and silver prices fuelled by US-China friction have dented demand for the precious metal in key consumer market India, in the lead-up to the peak buying period for the Diwali festival.
Advertisement
Gold was trading at US$4,197.5 per troy ounce on Wednesday afternoon, as a spike in US-China trade tensions fuelled investors’ demand for the asset, long seen as a safe-haven investment.
The silver market has been gripped by a lack of liquidity, sparking a worldwide hunt for the metal. Prices hit a record US$53.60 per troy ounce on Tuesday and declined slightly to US$52.43 on Wednesday.
India and China are two of the world’s largest gold and silver buyers. Indian consumers traditionally consider it auspicious to buy gold and silver during Dhanteras on Saturday and Diwali, which will be celebrated next Monday.
“Demand for buying jewellery has fallen by about 50 per cent this Diwali. People are also hesitating to buy because they think prices could fall,” said T. K. Chandran, managing director of Sree Kumaran Thangamaligai, which has a chain of gold and silver jewellery shops across south India.
Advertisement