Mike Curtiss (6 Nov 2010)
"Gold, Silver Supply Runs Dry for Diwali Festival"

 
Gold, silver coin supply runs dry during Indian festival
International Business Times ^ | November 5, 2010 10:47 AM ED

Posted on Saturday, November 06, 2010 12:05:07 AM by DeaconBenjamin

Sales of precious metal coins during the festivals in India, the world's largest consumer of gold, are higher this year as compared to last year, the Times of India reports.

Many jewelers ran out of low-denomination gold and silver coins on Wednesday evening, when Dhanteras kicked off the first five days of Diwali. The coins are typically gifted during the holidays.

''Most markets are witnessing a huge crowd," Praveen Khandelwal, president of Confederation of All India Traders, told the newspaper. "Business has been much better in comparison to the past two years."

Indian demand for gold typically rises by 40 percent during this season, when Indians celebrate the festival of lights. And the belief that sales are better this year was echoed by an advocate of Indian traders.

''Business has been much better than we expected," D N Rajpal of Lajpat Nagar traders' association told the newspaper. "During the weekend, there was hardly any space to walk in the market. Even on a Wednesday, there was a huge rush on account of Dhanteras. People turned up in large numbers to purchase gold, silver and cutlery."

Physical demand for gold in India helps boost prices around the world - while most gold is still bought and stored for investment and hedging, India leads the world in consumption - and Indian buying can help American investors in gold.