The Dussehra festival in India and the National Day of the People’s Republic of China, a seven-day holiday, are leading gold pundits to suggest a temporary increase in Asian physical gold demand amid reports of slowing interest due to rising prices.
“With the Dussehra festival coming up, retail demand is picking up, but it’s still much lower than usual. The record-high prices are causing a lot of shoppers to hold off on making purchases,” an Indian jeweler told Reuters.
Dussehra is celebrated on Oct. 12 and represents a special significance in India that encourages the buying of gold.
In recent years, gold purchasers have shifted slightly away from physical gold buying on Dussehra and have shown an increase in the buying of sovereign gold bonds offered by the Indian government. The bonds provide an annual return of 2.5% on top of the yellow metal’s typical price appreciation.
China and around the region
With Chinese markets closed for the Golden Week holiday, those looking to purchase gold had no choice but to turn to physical gold markets for exposure to the yellow metal.
Due to various cultural influences and practices, gold has been considered a popular gift in China and India for centuries.
According to Peter Fung, head of dealing at Wing Fung Precious Metals, physical demand has not increased in Hong Kong, where Golden Week is not typically celebrated.
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