Author: Paul Ploumis26 Sep 2014 Last updated at 07:51:04 GMT

MUMBAI (Scrap Monster): First day into the festive season, gold demand remained modest in India. The consumer turnout at Mumbai’s busiest Zaveri Bazaar was a clear indication that consumers are less enthused even by the cheap gold prices. Incidentally, Thursday marked the first day of the nine-day long Navarathri festival in India.

Gold prices in India are currently lower by over 9% when compared with the previous year. 10 grams of gold in India currently trades at Rs 27,088, which is 9.25% lower when compared with the prices of Rs 29,850 per 10 grams a year ago. According to traders, gold consumers in the country believe that price of the yellow metal my fall further, on account of strengthening dollar and buoyant stock markets. Hence the customers are seen spreading their gold purchases rather than buying at a single go.

According to jewellers, the gold prices are less likely to go down further. The weak rupee may act as a cushion for dropping gold prices. Also, it is almost certain that the government has no immediate to withdraw the restrictions on gold imports. With gold prices at lower levels, demand is bound to pick up as we head to October, they hoped.

Meanwhile, gold premiums in India are still below $10 per Oz over the London prices. The increased demand during the upcoming festive and wedding season may likely double the gold premiums. Bacchraj Bamalwa, Director, All India Gem and Jewellery Trade Federation (GJF), notes that the current gold premiums were much below the previous year’s levels. Gold Premiums had peaked at $120 per Oz during the festive season, last year.