May 9, 2011
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Gold buying up in India as Hindu festival starts

May 9, 2011

May 6 - Indian gold retailers on Friday reported brisk trade as an auspicious two-day Hindu festival got under way, triggering higher demand for the precious metal, despite soaring domestic and world prices.

Gold purchases are traditionally high during the Akshay Tritiya celebrations, which marks the birth of Annapurna, the Hindu goddess of food, and is seen as a lucky time for India's 900 million Hindus.

The festival, which ends Saturday, also coincides with the busy wedding season during which gold is traditionally presented to the bride and groom.

"We are seeing high walk-ins, mainly for gold jewellery," said a marketing official with the Malabar Gold group, a leading retailer in the southern city of Bangalore, where the festival is popular.

"High (gold) prices have not deterred people from buying the yellow metal," added Anand James, chief analyst at trading firm Geojit Comtrade in Mumbai.

Last year sales reached around 45 tonnes.

India is the world's biggest importer and consumer of gold.

Fears about rising inflation and commodity prices have pushed the cost of the metal to record levels, as investors seek a safe haven against economic turbulence.

Gold was at $1,483.39 an ounce in trade in London on Friday.

On the Multi Commodity Exchange of India Ltd, gold futures for June were quoted at 21,695 rupees ($487 dollars) per 10 grams. Prices hit a record 22,300 rupees levels at the end of April.

Demand for gold in India soared 66 percent to 963.1 tonnes in 2010, according to the World Gold Council, which expects robust demand in the current calendar year.

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