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Gold/Mining/Energy : Gold Price Monitor -- Ignore unavailable to you. Want to Upgrade?

To: Tom Byron who wrote (53497)	6/1/2000 10:12:00 PM
From: baystock	Respond to of 116767

Glitter back in the gold market (goArmy) Jun 01, 21:25 MUMBAI GOLD is back in vogue. After nearly two years in which its prices were on a slippery slope, the yellow metal is bullish again. Indians, who are the world?s biggest consumers of the precious metal, are expected to remain big buyers as fears of a prolonged drought have been put at rest by official forecasts that the monsoon would arrive on time and rains would be normal. "Although prices are now on the higher side, there is more demand for gold which will peak during the marriage season later this year," says Vijubhai Zaveri, a jewellery dealer at Mumbai?s Zaveri Bazaar, one of the biggest gold trading centres in the country. The World Gold Council is now backing Zaveri?s claims with statistics. According to the WGC?s quarterly Gold Demand Trends survey, Indians purchased 135.2 tonnes of the yellow metal between January and March this year, a 3 per cent increase over the first quarter of 1999. Should the trend continue throughout the year, gold imports for 2000 will exceed the 573.8 tonnes of gold imported in 1999. Indians account for 25 per cent of the gold sold in the world. More than 10 per cent of the gold mined in the world since time immemorial is now stored in India, chiefly among housewives in the country, according to the WGC. This does not include clandestine imports of gold from Dubai which account for a substantial chunk of imports into India. "Roughly 30 per cent of the gold sold in the souks of Dubai are destined for India," says an observer of the gold trade. Statistics seem to bear him out. In 1998, just after the Indian government reduced import duties on gold to Rs 250 per 10 gm, purchases via official channels shot up to 613.7 tonnes. However, an increase in duty to Rs 400 per 10 gm saw sales drop to 573.8 tonnes. Gold sold in India costs nearly 12 to 15 per cent more than in international markets. Despite the price differences, the WGC has forecast demand for the current year at 795.2 tonnes. A robust economy with the consensus forecast for higher gross domestic product growth in the current fiscal, buoyant industrial growth, continuing economic reform and the vibrant software sector are positive indicators for a good demand for gold in India, the report from the WGC said. ?The projected growth of the Indian economy augurs well for gold demand in the country. Overall, we anticipate a good monsoon to provide the necessary boost to agricultural production thus improving rural incomes. To a certain extent, this may offset the impact of the drought prevailing in certain specific pockets of the country," Derrick Macdo, regional director (India), WGC, said. Demand for gold in India is expected to remain high despite an increase in price. The gold price, which touched a low of Rs 3,500 per 10 gm a couple of years ago, has now risen to Rs 4,380 per 10 gm. A spokesman for the WGC attributed the strong price to a decision by the European Central Bank to stagger sales of gold in the open market. ? Reuters