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ASIA GOLD - India's festive spirit boosts demand for gold; China is on holiday

The physical gold demand in India increased this week, despite the record-high prices. A major festival in India's second largest bullion market boosted purchases while Chinese markets were shut for a holiday.

Indians celebrated Dussehra, the day when gold is considered auspicious.

Amit Modak is the CEO of PN Gadgil and Sons, a jeweller.

Despite the fact that demand has increased this week, experts in the industry say it is still lower than last year.

Modak stated that the share of gold coins in small denominations rose, but jewellery volume declined due to higher manufacturing costs. The overall festive demand is nearly 15% lower than last year.

On Friday, domestic gold prices were around 117.200 rupees for 10 grams after reaching a record-high of 117.300 rupees in the morning.

Indian dealers quoted a premium This week, the premium could be as high as $9 per ounce, which includes 6% import duties and 3% sales taxes, compared to last week's $7.

India's gold and silver imports nearly doubled from August to September, despite record prices.

A Mumbai-based gold dealer said that the festive season started on a better note than anticipated, as buyers continued to purchase despite increasing prices.

Chinese markets will be closed during the Golden Week and reopen October 9th. Last week, gold discounts for the top bullion consumer increased to $31-$71 an ounce.

Peter Fung said that if we see a correction in the price, there could be a strong buying activity once the Chinese market returns after the holiday. People would still want to buy gold, and they are confident about gold on the long-term.

In Hong Kong, gold In Singapore, the price was $1.50 higher than in Singapore. Gold traded at par prices with a premium of $2.20.

In Japan, bullion The price was equal to or higher than spot prices by $1 per ounce.

(source: Reuters)