Gold spike dims demand, futures trade at discount

Hobbled by surging prices in the past week, Indian gold jewellery buyers have tightened their purse strings in the hope that prices will ease in the coming weeks ahead of auspicious gold buying occasions.

- Ram Sahgal

This has come at a time of soaring volatility in the global financial markets, with questions being raised over the dollar's pre-eminence as a safe haven asset.

The drop in demand, estimated at 40-50% across industry by certain quarters, was brought on by the prices of the yellow metal shooting up more than 6% last week and 30% in the past year, according to data from Bloomberg. To be sure, jewellery companies are hopeful that the demand drop will be offset by the rise in prices.