Over 300 kg of gold sold as festive season kicks off in India

Despite gold prices being at the highest in the last three weeks, India’s sales in just one city totalled 300 kg on Sunday, as the country’s festive season of Diwali kicks off.

According to Daily News and Analysis, most of the jewellery shops in Dhanteras day, the first of the five-day Diwali Festival, also witnessed exceptional sales silver and diamonds.

Dhanteras is an important day for jewellery markets as it is considered very auspicious for buying gold. Seeing the huge surge in demand, most exchanges held a special trading session for gold ETFs from 11 am till 3.30 pm on Sunday.

Traders estimate 2.5 tonnes of gold sales by bullion dealers and jewellery retailers yesterday, a 30% increase from the same day last year. Consumer spending was robust, in anticipation of a further price spurt.

Last week a closely watched gold demand survey forecast that with 860 tonnes in purchases in 2012, China will overtake India as the world's biggest consumer of gold for the first time on a yearly basis this year.

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