Gold on the way of global trend

06 Jan '06

2 min read

Barring Delhi, gold continued to rule firm in other metros on Tuesday. The metal extended gains, after posting strong gains last year.

However, physical buyers refrained from purchases due to higher prices of the metal. Investors and speculators, on the other hand, were on a buying spree in the wake of forthcoming marriage season.

The yellow metal opened with a promising note on the first trading day of '06 in other Asian and European markets on Tuesday. The higher oil prices and softer dollar took the metal to a three-week high, extending last year's rally that saw prices surging more than 18 percent.

A weak dollar generally lifts buying of gold as the metal becomes cheaper for other currency holders. The metal is also considered as a hedge against inflation.

In London, gold for immediate delivery spurts by nearly $4 to $529.4/530.1an ounce as against $517.2/518.0 in the US market on Friday when the metal rose around $1.5 an ounce. Gold surged to $540.9 in December, its highest in almost 25 years.

Back home, standard gold (99.5) resumed on a promising note in Mumbai on brisk buying, supported by firm global advice and closed Rs 15 higher at Rs 7,635 per 10 gm.

Pure gold (99.9) also behaved in a similar fashion and rose by another Rs 20 to settle at Rs 7,675. In Kolkata, the yellow metal extended gains on speculative buying and closed Rs 35 higher at Rs 7,755.

In Delhi, the market moved narrowly on lack of support from fund managers and closed at the previous levels of Rs 7,675. Silver also showed a positive trend across the board and the metal rose about 2.2 percent to cross $9 an ounce in European trading.

The domestic market also showed the same trend. In Mumbai, spot silver (.999) attracted fresh enquiries from industrial users and jewellery fabricators and closed Rs 65 higher at Rs 12,820 a kg.

In Kolkata, it shot up by another Rs 100 at Rs 12,750 on good demand from stockists. However, the metal lost some support in Delhi on increased offerings from stockists and closed with a loss of Rs 25 at Rs 13,175 a kg.

The Economics Times

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