Gold Recycling Rises in India Due to Price Rise

Gold recycling gained pace in India as consumers preferred to cash in on prices at a week high, which deterred physical traders from placing fresh orders as wedding buying tapered off.

* Gold has gained 13 percent since October, with 30,000 rupees acting as a ceiling. The active February gold on the Multi Commodity Exchange hit a week's high of 29,344 rupees, before trading 0.27 percent higher at 29,325 rupees per 10 grams at 2:13 p.m.

* There is no investment demand as well. In fact, people are selling coins, bars and jewellery, said Prithviraj Kothari, president of the Bombay Bullion Association, a trade body, adding demand is slow as people don't have money and inflation is high and they don't have savings.

* Demand in the third quarter to September fell 20 percent to 200 tonnes, and the sentiment is expected to continue in the last quarter, traders and analyst said.

* The current quarter covers the peak festival and wedding season, when Indians traditionally splurge on gold jewellery and investments.

* Rising scrap could dent imports, which Kothari expects to be at 850-900 tonnes in 2011, down 11 percent from last year.

* Silver for March delivery on the MCX was 0.21 percent higher at 57,310 rupees per kg.