IT COULD just be sheer coincidence. On Monday when the equity benchmark index Sensex scaled the 15,000 peak again, it had gold for company. The yellow metal returned to the 15K mount after a gap of more than three-and-a-half months. On Monday, the price of pure gold (99.9) shot up by Rs 120 to close at Rs 15,010 per 10 gm in the Mumbai market, a major gold hub. Standard gold (99.5) also surged by Rs 125 to close at Rs 14,940 per 10 gm.
It's not the domestic demand that is driving the prices this season. Bullion traders said the firm global price, which is the combined result of dollar's weakness and rising crude prices, is the main reason for the latest run-up. Stockists and speculators turned active buyers after the metal rose nearly 2% in international markets. However, surging prices have reduced demand for gold jewellery drastically in spite of forthcoming marriage season, sources knowing the development in the market said. "Now, we are receiving more sellers than buyers because consumers prefer to cash out at the current level," said a leading bullion merchant in Zaveri Bazar.
A sharp decline in imports further helped the precious metal to gain ground, marketmen said. Gold imports fell by 50% in June, 2009, against the same period of the past year. The country imported nearly 12 metric tonnes of gold in June compared to 18 metric tonnes in the previous before, they added.
Other metros too recorded a hefty gain on the back of a strong rally in global markets. While in Kolkata spot gold rose to Rs 15,195, in Delhi it settled higher at Rs 15,090 per 10 gm. Chennai markets also saw a gain of Rs 100 as the metal settled at Rs 14,950 per 10 gm. In London, gold prices shot up to a five-week high on fund buying. Spot gold rose as high as $954.30 — its highest level since June 12, 2009 — and that compared with $936.50 in New York on Friday.
It's not the domestic demand that is driving the prices this season. Bullion traders said the firm global price, which is the combined result of dollar's weakness and rising crude prices, is the main reason for the latest run-up. Stockists and speculators turned active buyers after the metal rose nearly 2% in international markets. However, surging prices have reduced demand for gold jewellery drastically in spite of forthcoming marriage season, sources knowing the development in the market said. "Now, we are receiving more sellers than buyers because consumers prefer to cash out at the current level," said a leading bullion merchant in Zaveri Bazar.
A sharp decline in imports further helped the precious metal to gain ground, marketmen said. Gold imports fell by 50% in June, 2009, against the same period of the past year. The country imported nearly 12 metric tonnes of gold in June compared to 18 metric tonnes in the previous before, they added.
Other metros too recorded a hefty gain on the back of a strong rally in global markets. While in Kolkata spot gold rose to Rs 15,195, in Delhi it settled higher at Rs 15,090 per 10 gm. Chennai markets also saw a gain of Rs 100 as the metal settled at Rs 14,950 per 10 gm. In London, gold prices shot up to a five-week high on fund buying. Spot gold rose as high as $954.30 — its highest level since June 12, 2009 — and that compared with $936.50 in New York on Friday.
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