Indian Gold Buying Returning Post Jeweler Strike – HSBC

(Kitco News) - Indian gold buying is gradually returning to the market, helping offset the recent abatement in demand from gold exchange-traded funds, says HSBC.

Analysts cite a Reuters report saying that half of striking jewelers reopened their shops Monday.

The majority of jewelers were closed for six weeks in protest over the reintroduction of an excise duty on gold imports in the Feb. 29 budget.

“It is likely the resumption in business could boost demand from India, traditionally the world’s largest consumer and importer of bullion,” HSBC says.

“There is still a discount to world prices in India but the discount appears to be narrowing from the steep $25-40/oz level of just last week. India coming back into the global market may take up some slack from the apparent plateauing of ETF gold demand.”

After accumulating 9.25 million ounces since the beginning of the year, ETF demand has “notably leveled off this month,” HSBC says.

Courtesy: Kitco News