New Delhi, Sep. 8 (ANI): For the first time since February, gold prices crossed 1,000 dollars an ounce on Tuesday, as investors sought a safe haven due to the dollar's weakness and worries about the sustainability of the global economic recovery.
India's gold demand normally rises between August and October, when consumers buy bullion for auspicious reasons to celebrate major festivals such as Dussera, Diwali and Dhanteras.
Arun Soni, a New Delhi based gold trader and owner of a jewellery shop, said the price surge had dampened demand for the yellow metal.
"Demand is slow. People want to buy but because of the price they are still waiting for the price to correct," Soni said.
India's gold demand, which accounted for more than 20 percent of global demand in 2008, has seen a steady decline since bullion first powered to 1,000 dollars an ounce in February, which also sent local futures to record high at 16,040 rupees per 10 grams.
The president of the Bombay Bullion Association said on Tuesday that he expected India's gold imports to fall to 350 tonnes from 523 tonnes last year.
Jeweller Soni said the prices were being driven up by speculators and investors, rather than the actual consumers.
"Actually physical demand is not there. Very low physical demand is there. Only speculation is driving the price so high. Because actually people don't want to invest in the property market, they don't want to invest in the stock market. Still they don't have full faith in the stock market also. They see only the gold for investing," he said.
Gold can be bought as an investment in the form of coins and small bars, gold certificates, gold-backed securities or gold-oriented funds, in which investors can buy shares of mining companies. (ANI)