Gold shines bright amid Europe’s long shadows

Metal's Rally Continues As Investors Dump Other Assets; Silver's Lustre Remains Intact

 GOLD hit a record high in Mumbai on Tuesday, breaking the 19k mark to close at Rs 19240.5 per 10 gm, a 2.2% rise from Monday's close. The previous high of Rs 18,983 was hit on Saturday following weak US jobs data and a compounding of the Euro area crisis, the repercussions of which were expected to spill over into the current week.
   According to RK Nagarkar, GM of TBZ The Original, markets were anticipating a rise towards Rs 20,000 three to four months after Akshay Tritiya, which fell on May 16. "Fears of a slowdown have attracted fund flows to gold and that's taking prices to new levels. Scrap sales have not taken off in a big way as consumers are becoming aware of the value of holding on to gold. We have not faced as much of a problem as we buy as much as we sell contrary to some other jewellers who have overstocked and may thus be hit by the recent upward movement."
   He said demand during the June-August period tend to be slack in the absence of a festive season. However, he expects demand to pick up by Augustend when the festive season gets under way.
   Gold closed at Rs 19,100 per 10 gram, up Rs 150 in the Jaipur gold market. Silver prices followed with a rise of Rs 700-800 per kg. The price of silver refinery closed on Tuesday at Rs 28,700, up by Rs 700 from its previous close on Monday. Silver 999 hit a high of Rs 29,300, up by Rs 800.
   The upward movement has affected the jewellery trade with customers desisting from buying.
   In overseas markets, the metal rose to a record in London and New York as investors sought an alternative to currencies amid mounting concern over Europe's debt crisis.
   Bullion also hit highs in euros, sterling and Swiss francs after the region's common currency yesterday slipped to its lowest level in more than four years against the dollar amid speculation that debt-cutting measures by European nations will slow growth. Holdings in exchange-traded funds backed by gold reached records the past month.
   "It shows low confidence in the euro zone," said Bernard Sin, head of currency and metals trading at bullion refiner MKS Finance SA in Geneva. "There's no confidence in euros, dollars and no confidence in other currencies. The only solution is to be on the safer side, which is gold."
   Gold for immediate delivery gained as much as $11.86, or 1%, to $1,252.11 an ounce and traded at $1,249.57 at 10:53 am in London. That surpassed the previous all-time high of $1,249.40 set on May 14. Gold futures for delivery in August reached $1,254.50 and were last up 0.9% at $1,251.30 an ounce on the Comex in New York.
   Gold advanced 14% this year as investors sought to safeguard their wealth against the crisis in Greece and other European countries struggling to repay debt. The metal reached a record 1,051.273 euros, 869.621 British pounds and 1,451.157 Swiss francs on Tuesday. European equities dropped.
   Holdings in the SPDR Gold Trust, the biggest ETF backed by bullion, gained 13% this year. The fund's assets were unchanged at 1,286.36 metric tonnes on Monday, its website showed.

Gold rates at a record Rs 19K

 

Mumbai: Gold prices surged past the Rs 19,000 per 10 gram mark, an alltime peak, in the wholesale market in India on Tuesday as uncertainty about the global economy increased and the Indian rupee weakened against the US dollar. The timing also coincided with the wedding season in the country which supported the demand for gold even at such high prices.
   In the intra-day trade in Delhi, gold price closed at Rs 19,050, while it closed at Rs 18,750 in the Mumbai market. In the international market, gold was trading at $1,225 per ounce, its seventh consecutive session of gains and very close to its all-time peak of $1,245.
   Silver is on the rise too, with the price surging by Rs 200 to Rs 29,800 per kg on Tuesday.
   Industry players feel the global uncertainty, especially in the Eurozone, and a weakening rupee could push gold prices further up. "We are expecting (gold) prices to go above the Rs 20,000 mark soon although there is not much demand from investors,'' Suresh Hundia, president, Bombay Bullion Association, said.
   According to the World Gold Council, the yellow metal has given a return of 6.88% in the last one month, 22% in the past year and 208% in the last five years.

Sensex tanks 373 pts, rupee weakens    

Rising fears about the Eurozone and a possibility that the RBI could raise rates to stem inflation led to a sell-off on Dalal Street on Tuesday and the BSE sensex ended 373 points lower at 16,572. And as FIIs sold, the Indian rupee weakened by 80 paise to 47.16. P 23