Gold demand firm despite price rise

Gold prices moved up on firm overseas markets, but demand continued to remain firm with major festivals coming up, dealers said. 

"Demand has been good for the last couple of days...the supply situation has also improved," said Nilesh Shah of Shubham Jewels. 

The popular 12-day Ganesh festival has just started and in next two months India will celebrate Durga Puja and Diwali, both major Hindu festivals, when demand forgold increases for auspicious reasons. 

If prices remain near Rs 11,500, demand could improve further, said a dealer in a large private bank, adding if the market moves higher demand might come down a bit. 

Indian gold futures rose on a firm overseas market. Overseas gold firmed on Thursday as bargain hunting and physical buying countered volatile oil prices and recent gains in the dollar, helping to boost the metal after a brief dip to near its lowest in nine months.