Trade with Commodities: Gold hits new high of Rs 12,265

Monday, February 25, 2008

Gold hits new high of Rs 12,265

GOLD adds more glitter as its prices scale a new peak in the domestic markets on the back of speculative buying. On Monday, the prices of standard gold (99.5) touched a historic high of Rs 12,500 per 10 gm. Mumbai, the largest gold market in India, also hit an all-time high of Rs 12,265, up Rs 35 over the previous close. Delhi markets saw a gain of Rs 70 as the prices reached at Rs 12,320 per 10 gm — a level not seen before. The prices jumped by Rs 75 before the metal ended at Rs 12,225 per 10 gm in Chennai.
    Reports that gold fell more than 1% in international market on Monday after the US Treasury said it was confident Congress would support the sale of some gold held by the International Monetary Fund. However, there was no immediate impact in Indian bullion markets, analysts said. In London, spot gold fell as low as $933.50 an ounce and was last traded at $937.00/937.90 and that compared with $943.70/944.50 in New York on Friday.
    However, rising prices had an cascading effect on physical demand. Sales were very thin in local markets despite the ongoing marriage season. A section of marketmen fears that if prices continue to hover at the current level, demand for gold jewellery will fall this year.
    Bullion traders said the firm international prices, which is a combined result of the US economic weakness and a slide in dollar value, are the main reason for the latest run-up. A similar firmness was also noticed in silver on sustained support from upcountry buyers after a steep rise in international prices.