Weakening gold demand in India is a threat to rally

WEAKENING-GOLD-DEMAND-IN-INDIA:Weakening gold demand in India is a threat to rally

 

REUTERS - India's festival and wedding season is under way and continues till November.

Gold sales are expected to fall 40 percent this festival season to 200 tonnes.

Gold priced in rupees has hit record highs. Imports have already halved so far this year and a likely drought could further dent rural demand.

Rural areas contribute to about 60 percent of the country's demand.

Spot gold - priced in dollars - is up nearly 3 pct so far this month.

Demand has been boosted by growing expectations of Fed QE and ECB govt bond buying.

However, without physical demand from the world's top consumer, prices may not rally much further.

Gold jewellery demand: http://link.reuters.com/gyg89s

Gold price QE timeline: http://link.reuters.com/byw79s