Gold demand slumps as prices rise, seasonal consumption slows in India

Gold demand in Asia eroded this week due to higher prices with a seasonal slowdown denting the lure for the precious metal in second-biggest consumer India. Dealers in India offered discounts for gold, as the absence of key festivals kept demand subdued, especially as the wedding season has passed. "Every year, demand remains weak in July. There is no major festival this month. Wedding season is almost over," said Harshad Ajmera, the proprietor of JJ Gold House, a wholesaler in the eastern Indian city Kolkata. "For the next three to four weeks, demand will remain on the lower side. It will improve from the second half of August." Dealers were offering a discount of up to $1 an ounce this week over official domestic prices, compared to a discount of $1.20 last week, said four sources from jewellers, banks and gold dealers. The domestic price includes a 10 per cent import tax. Local gold prices have risen 2.7 per cent since July 10 after falling to the lowest level in six months. Commodity Trading Tips