Traders are back at betting on gold after last week's global stock market meltdown.
Retailers and marketmen chose to buy the metal pushing its prices by . 960 per 10 grams, the biggest jump in 11 months, in spot markets on Saturday.
The rally to the new high of . 30,300 per 10 grams was triggered by the weak US unemployment data released on Friday.
MCX gold for August contracts touched . 30,160 per 10 gram, up by 4% from the previous session. Open interest and trading value for August contracts were recorded at 16,595 and . 1.31 lakh crore on Saturday.
Prices had not made much headway in the last few weeks due to the depreciation of the rupee against the dollar in the last two months. But traders expect prices to go up to . 31,000 per 10 gram in the next 10 days. "People have once again realised that gold is the only safest haven against economical uncertainty. Until the release of US economic data on Friday, it was believed that gold was slipping towards the risky asset class. But gold certainly looks bullish now," said T Gnanasekar, director (research), Comtrendz. Funds have shifted their focus to gold buying or trading as stock markets across the world are not performing well, he added.
Brokers believe the deepening Eurozone debt crisis and the Greece elections on June 17 have supported the metal's safe haven appeal. The metal jumped 4.24% to $1,626 per ounce, the biggest rise in the last 11 months, in the international market. Spot gold hit a two-week high of $1,629 an ounce and was up by 4%. Gold futures on Nymex settled at $1,620 an ounce with trading volumes about 50% above its 30-day average.
"The next 15 days will make the picture clearer for gold. Traders have flocked towards gold as they feel the last trading sessions weren't great due to weak sentiments. They have realised the risk is less in gold than any other commodities or asset classes," said Naveen Mathur, associate director, currencies and commodities, Angel Broking.
It seemed that gold was losing sheen after jewellery and investment demand fell by 19% and 46%, respectively in the first quarter of 2012. Futures trading on commodity exchanges have fallen by 35% this April from April 2011. "But it was a temporary fall. Investors and traders were confused over conflicting international
sentiments. And therefore, they started exiting gold. But the buying trend is back and it will go on for long," said C P Krishnan, wholetime director, Geojit Finance.
"Indian investors have traditionally believed in gold as safe haven. The metal will continue to stay long. Economical factors across the world are going through a rough change, and hence, investors would only believe in their traditional choice as it has given them the best returns," said Madan Sabnavis, chief economist, Care Ratings.
Back in Demand
• Traders expect prices
to go up to . 31,000 per 10 gram in the next 10 days
• The rally to the new
high of . 30,300 per 10 grams was triggered by the weak US unemployment data released on Friday
No comments:
Post a Comment