Gold sizzles amid ruin in stocks

Gold sizzles amid ruin in stocks
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First Published: Tue, Feb 17 2009. 04 46 PM IST
Updated: Tue, Feb 17 2009. 04 46 PM IST
New Delhi: Amid continuing decline in stock markets, all-weather investment option gold zoomed past all previous records on Tuesday to set a record price of Rs15,420 per 10 gram in the national capital.
The metal surged by Rs560, the biggest single-day rise in over one-year on Tuesday in tune with rates in the global markets where gold rallied above $960 an ounce.
Dealers said melting stocks and forex markets left no other option for investors other than gold and they rushed park their funds in bullion.
There was frantic buying by stockists and speculators on firming trend on the global front amid a plunge in equity markets, they added. Analysts had forecast that gold may touch Rs16,000 per ten gram in short-term.
The steep rise in prices, however, brought gloom to retail buyers particularly in the ongoing wedding season. A retail jeweller in Delhi said many prospective customers were postponing their buying decision as they are unable to grapple with with never-before like prices.
“Retail buyers postponed their decisions to buy for the current marriage season in view of the sky-rocketing gold prices,” said All India Sarafa ( bullion) president Sheel Chand Jain, adding the surge was solely of speculative nature.
Meanwhile, the benchmark Sensex sliding for the second day in a row lost 270 points on Tuesday. In two days of sustained selling, the Sensex has lost a massive 600 points which indicate investors’ lack of preference for equities during this times of global economic downturn.
The market is facing fresh inflows of scrap gold as many are selling of old jewellery to create liquidity in this trouble times, said Suresh Verma of Omsons Jewellers.
In the overseas markets, the bullion added 2.23% to 963.60 an ounce.
“Foreign funds are pouring fresh money into gold and buying the metal at every support level,” said bullion merchant Ravi Jalan.
He further added that the global uncertainty raised hopes among investors that the metal would continue its upward march.
While bullion merchants expect the gold to touch Rs16,000 per 10 grams in next two weeks, international players, including banks, have forecast a price of $1,000 an ounce.
“Gold prices are extremely volatile. Within a week or so, prices would hover in the horizon of Rs16,000 level,” Gitanjali Group chairman Mehul Choksi said.
Goldman Sachs and UBS had raised their forecast for gold citing increased risk in financial markets and mounting concern that government spending on bank bailouts and economic stimulus will spur inflation.
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First Published: Tue, Feb 17 2009. 04 46 PM IST