Gold demand improves in India; supply remains tight

Gold demand in India improved on Wednesday, responding to correction in overseas prices, but supplies remained constrained because of restrictions on imports.

• The most-active gold contract for December delivery was 0.99 per cent lower at 30,109 rupees ($470) per 10 gram at 0934 GMT on the Multi Commodity Exchange.
  
  
• "Jewellers are trying to replenish inventory at lower levels but supplies are limited," said Harshad Ajmera, the proprietor of JJ Gold House, a wholesaler in Kolkata.

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• "Suppliers are seeking very high premiums over London prices," said Ajmera, adding many jewellers were not ready to pay such high prices.
• Overseas gold rose after hitting a four-week trough in the previous session, although prices seemed poised to test further lows as fresh uncertainty over the fate of US stimulus measures dented bullion's appeal as a hedge against inflation.
• India celebrated Dhanteras, the biggest gold buying festival, and Diwali earlier this month, when scarcity of the yellow metal and higher prices pushed consumers to buy silver and diamond jewellery.

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• The wedding season is underway in the world's biggest consumer of gold.
• The rupee rose after hitting a nine-week low of 63.90 to the dollar earlier in the day. A strong rupee makes imports of gold and silver cheaper.
• The silver contract for December delivery was 1.04 percent lower at 47,255 rupees per kg on the MCX.