 |
| |
WEEKLY
SECTIONS |
 |
|
 |
| Indian jewellers snap up gold, shrug off record price |
|
|
|
Tuesday, November 10, 2009
SINGAPORE: Indian jewellers chased gold bars on Monday as a firm rupee currency helped consumers cope with bullion’s rise to an all-time high in the middle of the country’s wedding season.
Purchases from India kept premiums for gold bars steady in Singapore at 40 to 60 US cents to spot London levels, while fears about further gains in prices spurred buying from the electronics sector in Hong Kong.
Gold hit a high of $1,106.60 an ounce to surpass Friday’s record of $1,100.90 on safe haven buying driven by weakness in the dollar, expectations of more buying from central banks and fears about the health of the global economy.
Dealers noted sales from Indonesia but the limited amount of scrap being returned to the physical market despite record prices suggested that holders expected more gains.
“I see purchases from India. Although it’s not really a buying spree, I would say it’s quite good,” said a dealer in Singapore. “If you calculate the price in rupees, it’s still OK for them,” he said.
Gold jewellery is presented as a gift at Hindu marriages in India, the world’s largest consumer, and forms an essential part of the dowry basket. India accounted for more than 20 per cent of global demand for gold jewellery last year.
India’s festival season peaked with Diwali, the festival of light, in October but the marriage season runs until December. The rupee jumped to a two-week high against the dollar, which could also offset a rally in the front-month contract on the Multi Commodity Exchange of India Ltd, currently December, to another record.
Cash gold has gained more than 25 per cent in 2009, driven by persistent weakness in the dollar, and recently by the failure of a meeting of the Group of 20 finance officials to talk more specifically about the dollar’s decline.
In theory, a weak dollar lifts gold’s appeal as an alternative investment and makes dollar-priced bullion cheaper for holders of other currencies. “From my point of view, I guess (gold) is more a momentum play and unless we get a change of views, the trend is pretty clear now,” said Adrian Koh, analyst at Phillip Futures in Singapore.
“There will be a time when the market corrects, the question is when,” he said. Gold bars were offered at a premium of 30 to 40 cents to spot London prices in Hong Kong, barely changed from last week.
“We don’t see many sales of scrap because everybody is still bullish about gold. That’s why gold is still at premium even though it’s now holding around $1,100,” said a dealer in Hong Kong. “We also see physical buying from jewellery makers and the electronic sector,” he added.
Premiums remained depressed at $1 an ounce to the spot London price in Tokyo, where retail investors kept cashing on gold’s rise to new peaks. “Nothing has changed. The industrial sector is very quiet because the gold price is very high,” said a dealer in Tokyo.
|
|
|
| Back
| Send
this story to Friend | Print
Version |
|
|
|
ISSN 1563-9479 
