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| Imports may rein in gold prices |
| BS Reporter / Mumbai Apr 19, 2009, 00:02 IST |
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Gold prices may see some correction as imports have resumed after a gap of two months. In January, only 20 tonnes of the yellow metal was imported.
Although demand was low and supplies came in the form of scrap gold in February and March, most jewellers carried only limited stocks. Since prices have moderated now with demand picking up, jewellers have started stocking up again.
Till now in April, 10 tonnes of gold have been imported and nearly 20-25 tonnes of further import are expected in the next couple of weeks. Rising inflows and a slowly appreciating rupee may see prices in the spot market moderating to Rs 13,700 or even lower next week.
During the week, prices have fallen by Rs 220, or 1.54 per cent, to Rs 14,075 per 10 gm. In the London market, prices have come down by $12.85, or 1.46 per cent, to $868.80 per ounce. Silver has seen a sharper fall as prices came down by 2.63 per cent to Rs 20,550 per kg.
London silver was down by 3.96 per cent to $11.88 per ounce. Silver has fallen below $12 for the first time in the last one month. Silver imports may rise in coming days as industrial demand is expected to increase. Though investment demand is still poor for the white metal.
Internationally, some profit booking has been seen from investors. SPDR, the largest US exchange-traded fund, has seen largest outflow of gold in the last six months during the past couple of days. On Thursday alone, outflow from this fund was 8.25 tonnes. SPDR still has 1,119 tonnes of gold.
Atul Shah, head of research at Emkay Commodities, said, “Internationally, gold is looking weak and may trade in a narrow range of $845-890 in the coming week.”
In India, Akshya Tritiya is expected to generate demand for jewellery. Sounding skeptical, Shah said, “It may be a big hype and we really have to see how much demand it generates.” The strengthening rupee may also result in a lower cost of imported gold.
Some traders were also unsure about the Akshaya Tritiya demand. Some demand may emerge on moderating prices, but it was difficult to say if that could support gold prices, said one of them.
Globally, Indian demand is considered important as investors are booking profit in gold and shifting money towards stocks. However, this may be a short-term phenomenon as in the medium term, gold is expected to go up.
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