In an interview with Manisha Gupta, PR Somasundaram, MD - India, World Gold Council (WGC), said he expects the current festival season to be the best in the last two years.

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"There is a lot of optimism, very positive sentiment. Footfalls have increased, prices are soft. And so, we think that this festival season will be the best in the last two years."

Jewellery purchases are up, but investment demand, which is the demand for explicit bars and coins, is yet to pick up, he added.

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"When prices soften, investment demand tends to be at the crossroads because people would want to see whether the drop in prices will carry on further. However, when prices drop, jewellery buyers are the first to come to the market because there are lots of occasions that they have missed, weddings have to take place, etc. So, jewellery purchases are up, while investment demand, which is the (demand for) explicit bars and coins, is still to pick up."

Domestic gold and silver prices rose modestly on Tuesday tracking gains in global benchmarks amid weakness in the dollar, making precious metals more attractive for those holding other currencies. Gains in domestic equities however, continued to aid investors' appetite for risk, limiting the upside in the yellow metal.

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(Edited by : Thomas Abraham)