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| Gold ETFs rise by 9.3% in May |
| Press Trust of India / New Delhi Jun 15, 2009, 17:05 IST |
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The prospect of gold buying through Exchange Traded Funds (ETFs) is getting better as gold holdings on paper in the country has risen by 9.3 per cent to 4.99 tonnes in May, 2009, according to a latest report.
"ETFs gold collection in India were up by 9.3 per cent to about 4.99 tonnes in May this year from 4.57 tonnes in the year-ago period," said Manasee S Gokhale, an economist with the National Commodity and Derivatives Exchange said in a bullion report.
Indian investors have increased investment in ETFs. The rise in gold holdings clearly indicates that investors who were watching all this while seem to have entered the market, she said.
According to the report, benchmark gold ETFs have increased to 2.03 tonnes in May from 1.5 tonnes in the corresponding period last year.
Whereas gold ETFs at UTI, Reliance Capital and Kotak remained at 1.32 tonnes, 1.23 tonnes and 0.34 tonnes respectively during May period, it said.
"ETFs have taken time to pick up mainly because India is a country bound by traditional rituals. One of those is the obsession with physical gold," Gokhale said, adding that the concept of buying gold on paper is new for otherwise traditional Indian consumer.
Gold ETF is an exchange traded fund that tracks the prices of gold. It is relatively a new concept in India.
With a rise in gold ETFs, the mutual fund companies and big corporate houses are setting their eyes on launching gold funds in the country, she added.
Similarly, the trend in the global market is catching up with after a long pause ETF buyers seem to be returning again, the bullion report said.
"Since mid-February, the funds have been in liquidation mode owing to the serious financial strain on the market," it said, adding that as May progressed, the net fund long position has accelerated in the global market.
There has been a good rally for gold in May and given that funds and investors are active, prices of precious metal could visit 1,000 dollar per ounce yet again, the report noted.
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