Posted by Mumbai, Nov 25 (www.GoldTradingCalls.com) Today Gold Prices in India are trading at a all time high of Rs 18,000 per 10 gram in the bullion market keeping global gold price trends firmer – on strong marriage season demand. Price of Gold today gained on back of high demand and a depreciating dollar. And, higher Gold prices in futures market indicate that spot prices of gold will further rise, feel bullion dealers.
However, in Multi Commodity Exchange on Wednesday gold closed at Rs 17,695. and in the global market also the yellow metal is shining on dollar depreciation and expectation that some more central banks may buy gold to diversify their reserves after the Reserve Bank of India had bought 200 tonnes of gold from IMF between October 19 and October 30. In London market, gold price rose by $13 per ounce (1 troy ounce = 31.1 gram) since Tuesday to $1,182.5 per ounce on Wednesday.
Two factors — Apprehension of depreciation of dollar and expectation of more central banks will buy gold — are pushing up the prices, says Vasant Mehta, chairman of Gems and Jewellery Export Promotion Council.
Gold has rallied around 13%, since RBI bought gold from IMF. So, in less than one month, RBI has made a notional profit of $875 million or Rs 4,000 crore. As the dollar is depreciating against other leading currencies like euro and yen, large investors are shifting their investments from dollar-denominated assets to other instruments. The dollar index has fallen to the lowest level in more than 15 months.
After the Chinese central bank, which accumulated more than 400 tonnes of gold since 2003, RBI’s decision to buy gold is further strengthening the gold prices. Between 2002 and 2006, central banks world over used to be net sellers of gold. During that period, according to a World Gold Council report, they sold 527 tonnes of gold every year on an average, amounting to 14% of its total supply. But, the central banks have now become net buyers of the yellow metal, putting an upward pressure on prices. Exchange-traded gold funds have also emerged as big buyers of gold.
However, some analysts feel that present bull run is not sustainable for a long period. After certain level, some of the central banks might find it attractive to divest their holdings in gold. That might lead to sharp fall in prices.
The retail demand in India, which regained its position as the largest consumer of gold in the world market, has also picked up with marriage season setting in. Gold price had crossed Rs 17,000 (per 10 gram) only last week. Prices in the other markets like Mumbai, Chennai and Kolkata remained below Rs 18,000 at around Rs 17,800. But the present trend suggests that it would cross Rs 18,000 across the country.
Two factors — Apprehension of depreciation of dollar and expectation of more central banks will buy gold — are pushing up the prices, says Vasant Mehta, chairman of Gems and Jewellery Export Promotion Council.
Gold has rallied around 13%, since RBI bought gold from IMF. So, in less than one month, RBI has made a notional profit of $875 million or Rs 4,000 crore. As the dollar is depreciating against other leading currencies like euro and yen, large investors are shifting their investments from dollar-denominated assets to other instruments. The dollar index has fallen to the lowest level in more than 15 months.
After the Chinese central bank, which accumulated more than 400 tonnes of gold since 2003, RBI’s decision to buy gold is further strengthening the gold prices. Between 2002 and 2006, central banks world over used to be net sellers of gold. During that period, according to a World Gold Council report, they sold 527 tonnes of gold every year on an average, amounting to 14% of its total supply. But, the central banks have now become net buyers of the yellow metal, putting an upward pressure on prices. Exchange-traded gold funds have also emerged as big buyers of gold.
However, some analysts feel that present bull run is not sustainable for a long period. After certain level, some of the central banks might find it attractive to divest their holdings in gold. That might lead to sharp fall in prices.
The retail demand in India, which regained its position as the largest consumer of gold in the world market, has also picked up with marriage season setting in. Gold price had crossed Rs 17,000 (per 10 gram) only last week. Prices in the other markets like Mumbai, Chennai and Kolkata remained below Rs 18,000 at around Rs 17,800. But the present trend suggests that it would cross Rs 18,000 across the country.
