Thread: Gold Shines Again

Gold is glittering. On Wednesday, price of the yellow metal (standard gold) scaled Rs 12,000 per 10 gram to touch an all-time high of Rs 12,005 in Mumbai and Rs 12,040 in Delhi. While in Kolkata it reached Rs 12,225, it closed below Rs 12,000 per ten gram at Rs 11,930 in Chennai. A senior bullion merchant in Delhi said if this trend continues, gold price would soon cross Rs 15,000 per ten gram. However, rising prices have reduced demand for gold jewellery in the last six months. Considering the present global scenario, prices are unlikely to come down in near future, he added. India consumed around 800 tonne gold in 2007. A source said if prices remain at the present level, consumption of the yellow metal will decline in 2008. In the international market, because of crude price rise to around $100 per barrel, gold price crossed $920 per ounce (one ounce = 31.1 gram). At the same time, as rupee depreciated by around 1% against dollar on Wednesday to Rs 40.24 against 39.80 on Tuesday, gold prices rose sharply in India. Gold price in India is determined after adding import duty of Rs 100 per 10 gram on the converted gold price in rupee from the prevailing dollar rate in the international market. As gold price has risen sharply in the last couple of months in the international market, its price in the domestic market has also gone up. Gold price was ruling at around $650 per ounce in February 2007 in the international market. In the last one year, it has gone up by over 40% to $920 per ounce. A merchant banker said as dollar is depreciating against other currencies like euro and pound, fund managers in US parked a part of their fund in gold to hedge against dollar depreciation. In the Japanese market also, 5 to 10% of investment has gone into the yellow metal. Demand of gold in the investment market has gone up. But, production of gold remained stagnant at round 2,000 tonne.According to World Gold Council, 2,047 tonne of gold was mined in 2007. Besides this, around 1,000 tonne of gold came from the recycled market. An analyst said price has gone up due to a mismatch in demand and supply. At the same time, rise in the crude price also created an apprehension of rising inflation in the world economy. This also made investors put money in gold to hedge against inflation. In an inflationary environment, while value of currencies decline, gold prices rise.

Experts say gold will touch 2000$ in 2012.........

i am sure it will because of Problems in USD EU etc..

NEW DELHI: Gold prices tumbled by Rs 110 to Rs 12,880 per 10 gram in the bullion market here on Tuesday on a slowdown in retail demand, fall in global rates and fresh arrival of the metal.

Silver prices also plunged by Rs 800 to Rs 24,000 per kg on heavy selling sparked by reports of a weakening global trend.

Standard gold and ornaments dropped by Rs 110 each to Rs 12,880 and Rs 12,730 per 10 gram respectively. Sovereign was unchanged at Rs 10,050 per piece of eight gram.

Silver ready tumbled by Rs 800 to Rs 24,000 per kg and weekly-based delivery by a same margin at Rs 25,400 per kg. Silver coins followed suit and lost Rs 100 to Rs 26,000 for buying and Rs 26,900 for selling of 100 pieces.

Traders said selling pressure in silver gathered momentum on reports that the white metal fell below 20 dollar an ounce in global markets, which normally set prices in domestic markets.

They said the southward movement in gold prices was due to lack of buying interest as the marriage season is almost over for now.

Fresh arrivals in the face of weak global trend was another reason behind the downward trend in the market, they added.