| Gold prices in the domestic markets today rallied to a near 52-week high as prices of pure gold (.999 purity) hit Rs 5955 per 10 gram and standard gold prices hit Rs 5910.
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| This followed the Asian markets, where spot gold prices rose to a fresh seven and a-half year high of $399.50.
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| “It is likely that gold may breach the psychological barrier of $400 in the US markets, which is most likely to happen tonight,” Harmesh Arora, vice-president of Bombay Bullion Association, stated.
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| While internationally gold has created a new seven and a half year high, domestic market has witnessed only a near year high.
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| “India’s pricing of gold is purely based on dollar-rupee currency conversion as it is imported. Taxes are added to it to arrive at final price. Since rupee is stronger, the domestic gold price does not match the seven and half year high of international market, but nevertheless, it still is near one year high,” an official at BullionIndia Consultants said.
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| The dollar -rupee rate was about 48 then as against today’s Rs 45.54/56 to a dollar. The domestic gold price may witness an all time high if gold crosses $ 400, he said.
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| Gold flirted with the $400-an-ounce level on fears of further Al Qaeda attacks but failed to hit the March 1996 level due to profit-taking in the Asian and European markets, agencies reported. It slipped back to $397.00/397.75 a troy ounce as against New York’s close on Friday at $397.25/398.00.
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| Investors, already rattled by violence in Iraq, were spooked by bomb attacks on Jewish synagogues in Turkey on Saturday and a Sunday statement, purportedly from Al Qaeda, claiming responsibility for the explosions.
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| The statement, sent to a London-based Arabic-language newspaper, said Al Qaeda was planning car bombings against the United States, Britain, Italy, Australia and Japan. The threat made investors flock to safe-haven gold, pushing up the prices in the process. |
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