Indian wedding season boosts demand for gold

Demand for gold in India is back on track as buyers prepare for this year's wedding season.

Despite the price of gold reaching 25-year highs, India's appetite for the precious metal is soaring.

Buyers appear to have resigned themselves to the fact that prices will remain elevated and are no longer postponing their purchases in the hope that they will fall in the future, analysts say.

"Buying has been very good," a dealer in a private bank told Reuters. "It could make up for some loss of demand we have seen in this wedding season."

With much more buying activity in the market this year, the coming wedding season, which begins in November, should lift demand further, and dealers and retailers will be making the most of it.

"We have been getting a lot of phone calls with people inquiring about prices," Chintamani Kaigaonkar of the jeweller store Chintamanis told Reuters.

India's wedding season is usually a busy time for gold jewelry buying as it forms an important part of Hindu marriage ceremonies.

Gold is often given by parents at weddings to give their daughters financial security. It traditionally accompanies them into their marriage to secure their financial independence within the husband's family.