India’s demand for gold has revived, with the country importing small amounts for the

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first time in two months, and is seen strengthening with a festival falling at the end of April, dealers and traders said.

Demand for gold revived when gold broke below the psychological level of $900 on Thursday and some dealers said they had placed orders overseas to replenish stocks.

“We have placed a lot of orders from Thursday onwards. If gold remains below Rs 14,500 per 10 gm, demand will continue to be there,” said a dealer in a private bank.

A gold supplier said demand was low, but may get stronger ahead. “There is some demand around, but still nothing to write home about,” said Afshin Nabavi, head of trading at MKS Finance, a Geneva-based gold supplier.

“I think with the festivities approaching and the gold price coming off, there may be some demand (in the near future).”

Gold prices fell more than 2 per cent on Monday in Asia, sliding towards a 2-and-half month low near $870 an ounce as regional shares climbed to a six-month high, signalling reduced risk aversion among investors hoping the worst has passed for the United States economy.

Gold has now fallen about 13 per cent since touching an 11-month high above $1,000 in February.

Last month, the head of an Indian trade body said the country had imported no gold for the second month in a row in March as high prices dented consumer demand in the world’s biggest market for the metal.

“Our records are showing zero so far,” Suresh Hundia, president of the Bombay Bullion Association (BBA) said. “Scrap sales have reduced, but demand is not there either.” Imports in February and March last year were 23 tonnes and 21 tonnes respectively.

India has been the world’s biggest buyer of gold for years, but imports slumped 48 per cent in 2008 to 396 tonnes. The falling trend has continued this year with imports in January plunging 89 per cent from the same month last year to 1.9 tonnes.

But the demand picture could brighten soon. Akshaya Tritiya, one of India’s two biggest gold-buying festivals along with Dhanteras, falls on April 27 when citizens, specially in the south, are expected to buy gold regardless of price, as they believe it will ensure lasting prosperity.

Last year, Akshaya Tritiya sales were at 48.99 tonnes, down 11 per cent from 2007, data from the World Gold Council shows.