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

To: Greg Ford who wrote (4302)	12/15/1997 4:50:00 PM
From: goldsnow	Respond to of 116753

>>"The Death of Gold".>>> ???? "Using words like 'tremendous', 'fantastic' and 'crazy' to describe current demand, traders in the Gulf Arab emirate said Indian customers were snapping up as much as they could of the metal... ÿFull story Low prices spur record Dubai gold rush 09:50 a.m. Dec 15, 1997 Eastern By Hilary Gush DUBAI, Dec 15 (Reuters) - Solid seasonal demand and the weakest prices in around 18 years have driven Dubai gold offtake to record levels, traders said on Monday. Using words like 'tremendous', 'fantastic' and 'crazy' to describe current demand, traders in the Gulf Arab emirate said Indian customers were snapping up as much as they could of the metal as an investment, and for wedding and Christmas gifts. ''Demand is very strong. Dubai offtake is running at record levels and there does seem to be a bit of a shortage of the metal,'' said Jeffrey Rhodes, general manager of Standard Bank London's Dubai representative office. The World Gold Council (WGC) expects Dubai gold imports to cross well over 600 tonnes this year, compared to 1996's record 350 tonnes, most of which was destined for India. In the first 10 months of 1997, Dubai imported almost 529 tonnes, WGC says. ''The low prices and wedding season mean that demand is crazy at the moment. With India's stock markets so weak, gold is the commodity of choice and people are adding it to their savings,'' said one of Dubai's biggest bullion dealers into India. Abdul Razzak, the chief executive of prominent gold trading house ARY -- which sells some 100 tonnes a year into the Indian subcontinent -- said buyers in India generally set themselves a budget to spend on gold, rather than a certain weight. This means that with the recently sharply weaker prices, people have tended to buy much larger quantities of gold. He said, as usual towards year-end, there was currently a shortage of Dubai's benchmark ten tola (TT) bars at a time when wedding demand is at its peak. ''The shortage means prices are half a dollar to $1 higher.'' Another trader said: ''December is a difficult month because many of the refineries go on holiday. Factories are not running at full capacity because staff are on holiday, which is one reason why TT bars are not coming in at full capacity.'' He said Dubai traders were currently receiving only 60-70 percent of the TT bars on order from European refineries. A TT bar is 3.746 ounces of 24 carat gold. Regardless of the apparent demand/supply imbalance, prices are still under pressure. On Monday traders quoted the TT bar at 3,918/3,920 dirhams ($1,068) from 3,988/3,990 dirhams a week earlier. On the international market, spot gold was quoted at $283.40/283.90 an ounce from $288.00/288.50 a week earlier. ''It defies logic to see so much demand and the price so low,'' a Dubai banker said, adding there needed to be a change in market perception about what central banks' plans for gold were, before prices could move up much. Calling $282 a critical level, a prominent Dubai gold trader said if gold broke down through that price, the metal could be expected to hit $150, seemingly regardless of physical demand, which another called ''alive and well in Dubai.'' But ARY's Abdul Razzak said an easing in Indian gold import rules meant Indian importers were starting to bypass Dubai and import directly from source. ''Seventy five percent of our shipments are now going direct to India from Switzerland, England and South Africa. Day by day the gold business in Dubai is disappearing.'' He said although the shipments were direct from supplier to India, companies like his still had a role to play as banks did not want to take on additional Indian country risk. India's government in October liberalised its bullion policy and allowed authorised agencies including banks to import and sell gold and silver in the domestic market. ($1-3.67 dirhams) Copyright 1997 Reuters Limited. All rights reserved. Republication and redistribution of Reuters content is expressly prohibited without the prior written consent of Reuters. Reuters shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon. ÿ