Gold Rides High on Festive Spirit
By Commodity Online
03 Sep 2007 at 11:59 AM GMT-04:00
resourceinvestor.com
MUMBAI (CommodityOnline.com) -- Gold has learnt to leave rupee appreciation aside and soared to new heights last week.
Gold’s upward trend is attributed largely to the coming festival season. Traders said the market is hoping for a big boom in the coming season as people in India have more money with them this year.
Standard gold in Mumbai rose to Rs 8,905 (US$219.20) last week, while in New Delhi, it was at Rs 8,870 per 10 grams. Pure gold, too, gained last week to close in Mumbai at Rs 8,955 per 10 grams.
Gold had strong fundamental support from the steady buying by the local bullion players in the wake of high jewellery inventories and lower overseas demand.
Analysts believe that consumers bought jewellery, fearing the upsurge may continue.
Optimists believe that the buying trend will continue in the coming festive season in September (Janmasthami and Ganesh Chaturthi) as the rupee’s appreciation will not affect gold prices that much in the local market as against its global movement.
Rupee appreciated up to 40.76, but soon recovered to the level of 40.98, resulting in the strengthening of gold prices in Mumbai.
The firmness in domestic gold price is largely attributed to a similar trend in London on Friday that percolated by the recovery in New York on Thursday. Gold opened at $668.00/668.60 per ounce, up from $664.70/665.50 late in New York on Thursday.
Gold opened higher in Europe on Friday on the news that gold production has been disrupted at a major mine in Papua New Guinea.
Global trend, which the domestic market follows, depicted a rise of $2.90 to $668.20 an ounce.
The October gold contract was up 0.6% at Rs 8,892 per 10 grams from the previous week close. MCX gold contracts registered a turnover of Rs 6,504.60 crore. Open interest of all gold contracts was 10,368 kilograms and total volume 73,092 kilograms.
According to market analysts, the major driver of gold prices remains high consumption level in India because of high disposable income and a growing economy with a strong GDP.
By arrangement with www.commodityonline.com. |
