|
| Gold at Rs 50 discount on weaker dollar |
| Dilip Kumar Jha / Mumbai Oct 09, 2009, 00:10 IST |
|
 Gold is selling at a Rs 50 discount in Mumbai’s Zaveri Bazar on widening disparity between prices in dollar and rupee terms. The precious metal in rupee terms failed to catch the speed of price escalation in dollar terms, as Indian buyers kept on the sidelines on rising prices in overseas markets.
The yellow metal set a new record at $1,059 an ounce (oz) in London on Thursday, on firm guidance from the Comex, where the contract for delivery in December jumped over one per cent in late evening Wednesday trade to close at $1,059.6 an oz. The metal has gained $60 so far this month and about 20 per cent this year, helped by the dollar’s weakness. Inflation worries also helped gold to surge enormously after central banks and governments across the globe poured money into the financial system to help stimulate the economy.
But, prices are holding currently low in India, due to the dollar’s weakness against the rupee. Since the rupee has strengthened about three per cent, to 46.68 in the past couple of weeks, hitting a fresh one-year high, while gold appreciated about five per cent, the bullion has created a disparity in Mumbai market. This is unlikely to be covered, said Ketan Shroff, owner of Pushpak Bullions, a jewellery retailer in Mumbai.
Gold is currently selling at Rs 15,870 per 10g, up Rs 25 from the previous day, in Mumbai. Shroff says this will rise marginally to trade at between Rs 15,900-16,000 per 10g. In dollar terms, however, he estimates the yellow metal to surge to $1,065 an oz. In Delhi, standard gold and ornaments rose Rs 60 each, at Rs 16,120 and Rs 15,970 per 10g, respectively. Both had gained Rs 260 each in the past two trading sessions. Silver spurted by Rs 300 to Rs 27,300 per kg.
India, which consumes 20 per cent of the world’d gold in the form of jewellery, is in the midst of the festive and wedding season, when the yellow metal is traditionally purchased. Also, initiatives like “The Great Indian Gold Rush” — a month long initiative by the World Gold Council (WGC) and promotional efforts by the Gems & Jewellery Exports Promotion Council (GJEPC) boosted gold sales by over 35 per cent on the auspicious occasion of Dussera.
Prithviraj Kothari, Director of Riddhi Siddhi Bullion Ltd, one of India’s largest gold importers, said, “Jewellers are currently passing through a liquidity crunch, as they have piled up huge inventory in anticipation of bumper sales in Diwali. Since gold prices have hit the roof, retail consumers are abstaining from fresh buying in anticipation of an imminent correction.”
Meanwhile, global commodity guru, Jim Rogers has suggested not to pick gold. He, however, expects the price to double in the next decade.
|
|
|
|
|
|
|
|
|
|
 Read Business news in |  |
|
|
|
|
|
|
Advertisements |
|
|
|
|
|
|
|
|
|
|
Content Guide
