Gold Rally Gives Hope to Investors in Asia

Gold has become an attractive option for investment in Asia due to an upsurge in recent weeks. The demand for gold has increased in the Indian market due to the ongoing wedding season.

India, which is the second largest consumer of gold after China has recently celebrated the Diwali and Dhanteras festival that jumped the demand and subsequently prices of the shiny yellow metal.

Statistics show that the gold demand increased during Diwali despite higher prices. The prices have touched the highest in the past five years.

The price rise has given hope to investors in Asia where stock market returns have generally remained at a subdued level.

Indian gold dealers offered discounts of up to $3 an ounce of gold that includes 10 percent import tax.

Sales were better than last year, according to the All India Gems & Jewellery Domestic Council. It is expected that the demand will remain strong throughout the month until the end of the wedding season.

Apart from the increased demand for gold in India, the chaotic Brexit deal had made investors fearful of the market that led gold to hit one week high on Friday.

Prices of stock gold had increased by 0.2 percent to $1,215.07 per ounce. Also, the bullion prices had increased to $1,216.79.

The gold could have leaped higher if it were not for the higher value of the greenback. A high dollar value makes it expensive for investors holding other currencies to invest in gold.

Demand for gold was also strong in Singapore with a noticeable buying activity. The premiums charged on the metal ranged from $0.6 to $0.9.

Gold demand and premium remained flat in Japan, according to a trader based in Tokyo.