Gold prices on a bull run in December

30 Dec '05
2 min read

Diamonds may be forever, but it was gold that endeared itself to investors seeking to hedge against inflation in 2005, as prices of the yellow metal touched a dizzy Rs 8,100 per 10 grams.

But the glee of the investor was not shared by the retail buyer, who ended up paying Rs 1,115 higher for 10 grams of gold in December compared to the beginning of this year.

Silver too created history on the Bullion market during the year when it touched a new peak of Rs 13,365 per kg on heavy offtake by stockists and investors towards the fag-end in line with the trend in the global market, which witnessed frantic buying, mainly by Japanese investors.

The record-breaking journey by the metals started on December two and lasted for nine days, during which standard gold zipped by a whopping Rs 680 per 10 gram silver by Rs 1,055 per kg. The total gain during the year for gold was Rs 1,115 and for silver Rs 1,765.

As the rise and fall in prices in India is linked with the global trend, gold shot up to a high of 541 USD per ounce and silver jumped up to 9.09 USD per ounce in the global market due to heavy buying by investors as a hedge agaisnt inflation, which boosted the sentiment in India too.

The previous all-time high recorded by the yellow metal in the international market was 873 USD per ounce in 1980.

Heavy demand for the metals in the world market was due to various factors like fall in dollar rates, steep rise in crude prices and widespread damages by Hurricane Katrina, which touched the US coast on August 29.

The Economics Times

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