MUMBAI -- Gold sales in India have started picking up again as lower prices, a strong currency and a looming wedding season combine to revive demand in the world's largest consumer of the precious metal.
Gold prices in Mumbai, the country's largest bullion market, are currently quoted at 16,515 rupees ($371.5) per 10 grams, down a from record high of 18,340 rupees in early December.
"As prices have been stable between 16,500 rupees to 16,700 rupees in the last month, we have seen fresh buying coming in," said Prithviraj Kothari, director of RiddhiSiddhi Bullions Ltd., a large bullion trader.
Daily sales have jumped three times since December to around 600 kilograms-700 kilograms of gold jewelry in Mumbai, said Mr. Kothari, who is also a director with the Bombay Bullion Association.
Sales are expected to rise further as the Indian rupee's value has strengthened to near 18-month highs, making gold imports cheaper. Nearly all of India's annual demand of 700 metric tons-800 metric tons is met through imports.
"If prices decline further then daily offtake could rise to 1.0 ton-1.5 tons in Mumbai itself," Mr. Kothari said.
Prices are expected to be in the range of 16,300 rupees to 16,700 rupees per 10 grams during the marriage season, which starts in May, when Hindu families traditionally give gold ornaments to brides as the metal is seen as auspicious and a form of savings.
Gold imports to India rose between January and March to an estimated 94 tons-96 tons from 22.5 tons in the same period last year.
India imports between 700 tons-800 tons of gold annually, but weak demand due to record high prices reduced imports to 459 tons in 2009, according to World Gold Council data.
"In April, imports could be around 25 tons-30 tons, while imports in May could rise to 50 tons due to marriages and Akshaya Trithya," said Daman Prakash, director of MNC Bullion Pvt. Ltd. Akshaya Trithya is an auspicious day in the Hindu calendar to buy gold.
"Historically, April-September has been a lull period for gold prices in the international markets. Prices will be stable during this period, attracting good buys," said Harish Galipelli, head of research at JRG Wealth Management.
Demand in India was hit last year by volatile prices, as people either sold jewelry as prices rose to record levels, or put off purchases as they waited for prices to fall.
