India’s gold demand during the forthcoming festival season is likely to fall by 30 per cent as compared to last year, owing to high prices, a top industry official said here.

“Despite high gold prices, there is a demand for gold in the market. However, overall demand will be less by 30 per cent during the forthcoming festive season,” Prithviraj Kothari, Director, Riddhi Siddhi Bullions, told PTI on the sidelines of a conference here.

In the domestic market, gold demand in the first half of 2009 fell by 55 per cent year-on-year and jewellers expect the weakness to extend to the second half of the year despite major festivals.

The country’s gold demand normally rises between August and October, when consumers buy bullion for auspicious reasons to celebrate major festivals such as Dusshera, Diwali and Dhanteras.

“People are waiting for price to go down. However, they may buy at this level in the forthcoming festival and marriage season,” Mr. Kothari said, adding that the demand from the rural markets could be seen if the monsoon is good.

Commenting on the price trend, Mr. Kothari said, gold may see some correction and price may touch Rs 15,300 to Rs 15,500 per 10 grams in the next fortnight.

Mr. Kothari is also bullish on silver saying the prices of the metal have not appreciated in line with the gold prices.

“Silver prices may touch Rs 30,000 per kg by Diwali from the present Rs 26,933 per kg,” he said.

Meanwhile, Riddhi Siddhi Bullions plans major expansion in south Indian market.

“We are opening four new branches in Kerala at Thiruvananthapuram, Cochin, Trichur and Calicut on October 10.

We are offering over the counter(OTC) trading platform, where jewellers can buy and sell gold on physical delivery basis,” Mr. Kothari said.

The company may raise money through public offering in the next two years to fund its expansion plans, Mr. Kothari added.

At present, gold prices are ruling at around Rs 15,860 per 10 gram in the domestic bullion market.

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