Global gold prices set to get Indian festive season boost


Gold prices are tumbling worldwide, but demand during the festive season in India may soon come to their rescue, as the festival of Diwali is set to prompt investors to take advantage of the recent correction.

Dhanteras, the first day of Diwali, falls on 28 October this year. Indians tend to make high-end purchases, and mainly the yellow metal on that day, as they believe it will bring them good fortune. India is one of the largest markets for gold jewellery in the world, and is the second-largest importer of gold.

Gold prices have slumped sharply in recent times, and this may augur well for the Indian buyers.

Gold futures for December delivery dropped for eight out of nine sessions, slumping 6.86% and traded at four-month low of $1,253 an ounce on Thursday on Comex in New York, and fell below their 200-day moving average as odds turned in favour of US Federal Reserve hiking interest rates. The dollar, too, strengthened. Fears that the European Central Bank may pare its bond-buying programme also unnerved investors. On Friday, gold futures snapped its losing streak and edged 0.20% higher.

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