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Gold prices zoom to 1999 high on heavy buying, poor supply

Following were the bullion closing rates at the Bombay bullion market today. Silver (per kg.) .999 Rs 8,200. Raw Rs 8,085. Gold (ten gm) standard mint Rs 4,400. 22-carat Rs 4,070 (nominal). Ten-tola gold (per biscuit) Rs 51,500.

Prices of gold biscuit recorded an all-time- high of this year by touching a new peak of Rs 51,500 per ten tola, while prices of standard mint and 22-carat gold also rose by Rs 170 and Rs 160 per ten gram respectively in a single trading session to Rs 4,400 and Rs 4,070 on heavy buying support coupled with short supply in the market today.

Gold prices continue to surge in the local market from last couple of days in reaction to the Britain's gold auction held last week.

The festival demand also added the upward trend in the market.

Ten tola gold biscuit prices shot up by Rs 2,900 in the last three consecutive trading sessions while the standard mint and 22-carat gold prices gained by Rs 250 and Rs 230 respectively.

The white metal also followed suit . The prices of silver .999 and raw advanced sharply by Rs 85 and Rs 90 to Rs 8,200 and Rs 8,085 per kg respectively on renewed buying interest from industrial users and local dealers, sources said.

Bombay Bullion Association president M L Damani said the gold prices widely fluctuated since last few days due to shortage of ready stocks coupled with ongoing firm trend in the London gold market.

Gold quoted higher at US $ 270 per ounce against 266.85 per ounce quoted on previous day.

There were reports that the European Central Bank in a statement siad that its annual gold sales will not exceed around 400 tonnes and the total sales over a period of five years will not not exceed 2,000 tonnes. The statement, in fact a clarification, lifted market sentiment in India, allowing the prices to reach high levels, traders said.

The International Monetary Fund also announced last Sunday that it has officially endorsed a plan to revalue 14 million ounces of its gold reserves through off-market gold sales which also helped the bullish trend.

Prices of gold biscuit and standard mint shot up by Rs 2,100 and Rs 170 to Rs 51,500 per ten tola and Rs 4,400 per ten grams in a single day respectively.

Similarly, 22-carat prices also zoomed up by Rs 160 to Rs 4,070 per ten grams on brisk demand from local buyers and jewellery users. Sellers were inactive because of paucity of supply from smugglers and Non Resident Indians.

In Delhi, gold opened at Rs 4,450, up from Saturday's close of Rs 4,225 per ten grams, the highest price since May in the single biggest price surge in the last ten years.

Gold prices remained the same at the closing for the day, registering a surge of about 5.3 per cent in a single day.

(In Bombay, gold opened with a gain of Rs 195 at Rs 4,425 and in Ahmedabad at Rs 4,325 from Friday's close of 4,184 per ten grams.)

Gold climbed to its highest in nearly five months and opened 15.50 dollars higher at $ 282 per troy ounce in Europe today compared to its Friday's New York close of $ 268.50/269 per troy ounce.

Prices of yellow metal in the capital were prevailing in the range of Rs 4,410 per ten grams on May 1 and May 6 this year. Gold prices in Europe were prevailing at $ 286.35 dollars per troy ounce on May 3. The current surge in world markets is still below this level.

The prices of gold at the end of May were down to Rs 4,180 per ten grams and overseas advices were at $ 270.25 per troy ounce.

All India Sarafa Association president Sheel Chand Jain said, ''The consumers were waiting for auction of 25 tonnes of gold by Bank of England fixed for September 21, which they considered would bring down the prices of yellow metal like the last auction on July six. But it reversed the trend and prices further went up as there were more bidders.''

Jain said, ''Now there are no chances of prices coming down, the uptrend would continue and the demand is expected to pick up because of the ensuing wedding season.''

Gold would be sold in small quantities in the world markets and the consumption will prevail. Future auctions will not decrease prices, he added.

In Delhi, silver gained Rs 75 at Rs 8,030 per kg and weekly delivery went up by Rs 110 at Rs 8,050 per kg as prices in London opened at $ 5.32/5.34 as compared to last close of $ 5.24 per ounce.

Silver coins did not lag behind and went up by Rs 100 per 100 pieces at Rs 11,000 for buyers and Rs 11,100 for sellers.

UNI

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