Gold always falls in summer. That is the conventional wisdom among gold traders, conditioned over decades in which the period from June to August has been characterized by slack demand for bullion.
But this summer has been rather different. On Monday, gold surpassed $1,600 (U.S.) a troy ounce for the first time. Even when it did suffer a brief correction at the end of June, it dropped only as far as $1,478, a level that only three months earlier would have been a record.
It is a swirl of macroeconomic worries - from sovereign default in the eurozone and the U.S. to the possibility of a third round of "quantitative easing" by the Federal Reserve - that have helped gold through the psychological barrier of $1,600.
Yet one driver that has underpinned the market has gone largely unnoticed: an unexpected rush of buying from India.
With India battling high inflation, gold has found favour there as a means of wealth preservation, just as in China and other parts of Asia. According to the most recent data from the World Gold Council, India and China accounted for 58 per cent of global physical gold demand in the first quarter of this year.
In recent weeks, though, Asian buyers and Western investors have been taking turns to drive prices higher. Investments in exchange traded funds backed by physical bullion rose to a record 2,156 tonnes on Friday, according to Barclays Capital, while investors boosted their bets on higher gold prices in the U.S. futures market by the most since September, 2009.
Monday's jump in the gold price came as part of a wider risk-aversion trade that saw U.S. and European bank shares sold off, the euro slide to a record low against the Swiss franc and yields on Spanish and Italian debt resume their upward march: a "flight to safety" in other words.
But the scale of the Indian buying has surprised traders because its gold market is usually quiet in June. The country has traditionally bought gold in seasonal patterns, dictated by festivals such as Akshaya Tritiya in May and Diwali in September, as well as the wedding season, which runs from September to December.
The shift in buying patterns from India, the world's top consumer of bullion, is changing the seasonality of the global gold market. While gold's performance in the summer months has tended to be sluggish over the past three decades, the yellow metal this year has risen 4.5 per cent since the start of June.
Abha Kachaliya, a Mumbai-born chartered accountant in her mid-twenties, is typical of the trend. As a child, she remembers her mother would dress her up to go out to buy gold at Zaveri Bazaar, the city's precious metals hub, for Diwali, the festival of lights.
"It was a special and exciting moment," she says. "Every year for Diwali the whole family would go out together to buy as much gold as we could afford."
Now, though, Ms. Kachaliya takes a more opportunistic approach to buying gold. Although Diwali continues to be a special day for her family, she does not feel that is the only day she can buy gold any longer. "Whenever I have a chance I invest in gold, be it at the bazaar or online, I'll jump on any good deal."
Buyers such as Ms. Kachaliya helped the Indian market buck the normal trend in June. Large bullion-dealing banks reported a surge in buying from the country, a factor traders say has been instrumental in keeping prices close to historical highs. Sales to India from UBS were more than double the level of a year earlier.
"Undoubtedly over time the market is becoming less seasonal," says Tom Kendall, precious metals strategist at Credit Suisse.
There are several reasons for the shift. One is simply the growing wealth in India and across emerging economies that has lifted demand for gold. "What used to be wedding season now lasts for nine months of the year," Mr. Kendall says. "There were not enough auspicious days of the year, so they found some more."
But Indians are also beginning to approach gold more like Western investors, traders and analysts say, putting a proportion of their wealth into gold and buying opportunistically on dips.
Atul Shah, head of commodities at the Mumbai-based brokering firm Emkay, says that the days when people acquired gold only during festivals and weddings are over. "Indian consumers are buying gold all year round," he says.
Vishal Kapoor, head of wealth management at Standard Chartered in Mumbai, says that Indian consumption habits have changed over the past decade. "In recent times we have seen a shift in buying trends," says Mr. Kapoor. "What is different of late is the availability and the acceptance of gold as a financial asset and not just as something you keep in a locker at home."