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Gold price hits a 15-month high since demonetisation in November 2016

The price of standard gold (995 purity) moved up by Rs 70 to open on Friday at Rs 30,645 per 10 grams in the popular Zaveri Bazaar in Mumbai

Dilip Kumar Jha  |  Mumbai 


GGold prices on Friday jumped 0.23 per cent in Mumbai to hit the highest point in about 15 months since demonetisation in November 2016.

The price of standard (995 purity) moved up by Rs 70 to open at Rs 30,645 per 10 gm in Zaveri Bazaar. In November 2016, bullion was traded at Rs 30,600 per 10 gm in official transactions.  Unofficially, however, was traded even at Rs 45,000 per 10 gm.

The movement in prices in India is largely dominated by fluctuations in world In the benchmark London spot market, was trading at $1,361 an ounce (28 gm) in early trade on Friday afternoon. This is the highest level since August 2016. 

Investors are booking after the collapse of cryptocurrencies such as bitcoin.

“There has been a confluence of factors supporting the rise in prices, which remained low for more than a year. The US interest rate hike, which kept prices subdued over the last one year, has started working in its favour due to inflationary pressure. Thanks to bitcoin’s decline, the investment demand has returned. Additionally, a weaker dollar has also helped gold’s upward move. We see gold’s immediate resistance at $1,375 an ounce and thereafter $1,430 an ounce,” said Gnanasekar Thiagarajan, director, Commtrendz Research.

The fundamentals are supporting the rise in prices. The data compiled by the World Council (WGC) showed a 6 per cent increase in the global demand during the October-December quarter to 1,095.8 tonnes. 

Gold price hits a 15-month high since demonetisation in November 2016
Global exchange-traded funds (ETFs) added 202.8 tonnes in 2017.

prices are likely to gain $80 more in the next couple of months due to a sustained depreciation in the US dollar,” said Kishore Narne, associate director (commodity and currency), Motilal Oswal Financial Services Ltd.

Meanwhile, the rise in prices has reduced fresh purchases of jewellery.

“Scattered orders are coming in only through monthly deposit schemes or re-melting of scrap jewellery. Consumers seem to be fearing the government’s monitoring authorities. We expect this wedding season to remain lacklustre,” said Kumar Jain, director, Umedmal Tilokchand Zaveri, a bullion dealer and jewellery retailer in Zaveri Bazaar.

First Published: Sat, February 17 2018. 01:49 IST