re: stand out long
Yet more evidence of the shocking precious metals glut. It really makes me google.
Billy
High gold price not to hit demand
Gold hits record-high in local market, 25-year high in London
Sangita Shah
Mumbai, April 18 The sizzling gold prices may have dampened the demand in the country, but traders see this as a temporary phenomenon. The lacklustre demand is more due to volatility in the prices and not the high prices per se, opine jewellers.
There has been about 33% drop in Mumbai's daily gold consumption to 500-600 kg per day from a normal 800-900 kg around this time of the year, dealers said. "Demand for gold is definitely lower compared to the last year. But last year was an aberration, as demand had re-surged after prices held steady at higher levels. So the demand should be compared to the year prior to that (2004). The comparison states that there has not been much drop in demand," Sanjeev Agarwal, MD (Indian sub-continent) of World Gold Council said.
In fact, there are reports of sharp rise in gold demand for investment purpose, and consequently many banks retailing gold coins and bar have seen a rise in sales. The rising prices are not deterring investment demand, a dealer at a local shop stated. "I retail more of coins these days," the dealer added.
Gold and silver both scaled new peaks and gold closed above Rs 9,000 level on Tuesday, fuelled by rally in the global prices. Pure gold closed at Rs 9,100 per 10 gram in the domestic spot market after gold extended its upswing to cross a 25-year high in London. Precious white metal silver peaked to a new high of Rs 20,640 per kg.
Gold rose in London, extending a rally to a 25-year high, as investors bought bullion on concern higher global energy costs may spur inflation, reported Bloomberg. Crude oil in London rose to a record $71.83 per barrel on concern, tension between the US and Iran over the Middle East countries nuclear program will lead to an energy shortage. Some investors buy gold to hedge against inflation.
Gold for immediate delivery rose as much as $5.42 or 0.9%, to $618.90 an ounce, the highest since December 5, 1980. Gold futures jumped to $873 an ounce in 1980, when US consumer prices rose 12.5% from the previous year.
Bullion dealers and jewellers are of the opinion that the pent up demand will emerge, once the prices show some signs of stability. "Gold is part of Indian culture and price factor cannot eliminate the demand. At the most the buying remains postponed," a senior bullion dealer said.
Another Jaipur-based jeweller concurred. He said, "Let the prices stabilise and you will see resurgence in demand. Besides, now the consumers have reconciled to the fact that high prices are going to be the order of the day in the near future. Even at higher levels, there will be buyers."
Moreover, there has been all round rises in the country's wealth creation. Stocks have jumped manifold in a year, and real estate prices have equally risen. In one year, the 30-share BSE Sensex has gained a hefty 91%, while realty prices have appreciated between 30%-50%. "There has been huge rise in the wealth, and it has to be diverted to the traditional savings instrument-gold," Mr Agarwal added.
