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Gold scales all time high in Mumbai

Traders increase bullish bets on bullion, ratio trading indicates silver to outsmart gold- yellow metal trading at 1.3 % discount to cost of imports

Rajesh Bhayani  |  Mumbai 

prices today hit new all time high in Mumbai spot market. Prices today closed at Rs,32,340 up by Rs.190 from yesterday. also has seen a level not seen since last 5 Weeks with prices going up by Rs.770 to close at Rs.63960per kg.

Price jump in last two month is mostly devoted to increase in dollar against rupee making imports of the yellow metal costlier.

has been in demand in international market with several central banks also increasing as a part of their reserves with Brazil a latest one to do so.

Interestingly today’s cost of import is around Rs.32,800 per 10 gram but is being sold at Rs.32,340 which is 1.4 % discount. This is happening because traders who have stocked at lower prices are selling at lower price to attract customers. “If this discount widens and remains for few more days it incentivizes round tripping of gold,” said a veteran bullion trader. When domestic price is at a discount, traders start buying locally to make raw ornaments to exports. Since last few years India’s exports of in form of raw ornaments is estimated to the tune of 150 tons per annum. In case of raw ornaments high value addition is done rand cost of manufacturing is also much lower. This is done to flout exports norms as exports in form of bars etc is not allowed.

“On MCX, traders increased bullish bets on and by adding open interest,” said Ajay Kedia of Kedia Commodities. DATA.

He believes that apart from general weakness seen in dollar which was reason for to climb up, indications from Ratio trading suggest that while general bullish trend in and will be maintained, will outsmart in coming months.

Ratio indicates how many ounce of you can buy with one ounce of At present the ratio is 51.2 while he expects that in 2012 that is by December end the ratio could fell below 50 and come to 49. Which means, according to him, could see Rs.68,000 per kg while will climb to Rs.33.500 per 10 gram. His target for the ratio for next year is 44.

rallied 11 percent this year as investors and central banks bought bullion to diversify assets. Holdings in global exchange traded products (ETPs) backed by bullion rose to a record 2,605.318 metric tons yesterday, data compiled by Bloomberg show. Kazakhstan, Turkey and Russia boosted reserves in October, according to data on the International Monetary Fund’s website, joining Brazil, which raised holdings to the highest in more than 11 years.

Today in international market went up and futures crossed %1750 an ounce level after five Weeks while climbed six week high as dollar dropped to three week low against major currency basket. In recent times last the yellow metal had touched $1,755 on Oct. 17 . Dollar’s fall was triggered by new set of data showing increase in German confidence index in November and on the speculation that Europe’s policy makers will agree to keep aid flowing to Greece.

First Published: Sat, November 24 2012. 18:12 IST