India: Higher Price for Gold means Lower Demand

This is a very simple rule of economics- if the price of a product increases then demand falls. Earlier today, gold price in India in fact decreased some but still it was some high for most people and that is why there was weak demand for this commodity in the markets.

Reuters reported:

The Indian rupee held at the day's low in afternoon trade on Tuesday, mirroring losses in domestic shares, while gains in the dollar versus major currencies also added to the downward pressure. See [ID:nBOM413662]

Most traders expect demand coming in at sub-14,000 rupee levels.

"We expect buying interest coming in at prices less than 14,000 rupees," said Haresh Acharya, head of bullion desk, at Parker Agrochem, Ahmadabad.

It should be stated here that India is one of the top 3 largest markets for gold. In fact, Indian women are crazy for ornaments and it is a very big market. In weddings, the main item for gift is gold ornaments.