The price of gold, buoyed by a weaker dollar and heavier demand from Asian markets, has strengthened through the first fortnight of October after declining during the month of September. The yellow metal traded at $ 1,237 per oz in the international markets, recovering from the 12 month low at levels of US$ 1,190 per oz it touched at the beginning of this month.

In India and China there was stronger demand for physical gold from jewellers to cater to the festive season demand. While Indian jewellers were making purchases ahead of expected spike in demand for Diwali, their Chinese counterparts were replenishing after the Golden Week holiday.

Globally the indications that the US Federal Reserve may not hike interest rates as had been earlier expected, saw a slackening of investor interest in equities and the dollar, prompting more than a few return to the safe-haven of gold.

Last month’s fall in gold prices in India where the yellow metal reached near the Rs 27,000 per 10 gms level, however did not spark off major buying among consumers. Though the rate was significantly below the Rs 32,000 per 10 gms level that had prevailed a year earlier, it is believed that consumers were waiting for a further fall in prices.

Trends in the silver market broadly mirrored that of gold with prices declining in September and touching sub $ 17 per oz levels in early October before recovering to cross the $ 17.5 per oz levels by mid-October.