|HOME | MONEY | GOLD | WEEKLY REVIEW|
|October 30, 1999||
Not a golden Diwali
Gold prices in the Indian bullion markets contiued to be under correction after the recent record rally. Gold fell below $ 300 level in the global market and local gold prices remained under pressure.
"Festival buyers in the domestic market stood at the sidelines in the falling market," said a jeweller said, adding, " However a drop in the prices is now attracting seasonal enquiries and volume is likely to pick up ahead of Diwali festival." Diwali is being celebrated on 7th November.
24-carat gold fell to Rs 4,550 per 10 grams from Rs 4,770. However , festival demand at the reduced level helped prices to recover to Rs 4,650 later in the week. Likewise, 22-carat gold fell to Rs 4,210 from Rs 4,410 and then recovered to Rs 4,300 per 10 gram. Prices of gold biscuits (116.65 grams) crashed to Rs 53,400 per piece from Rs 55,800 and then climbed to Rs 54,400.
A lower than expected seasonal demand and losses in the global prices has pulled down local gold, according to Dinesh Parekh, director, Bombay Bullion Association. Gold prices in the global market have fallen to $ 288-290 per ounce from $ 305-$306 during the week. Gold had climbed to $ 335-$340 (a record high of two years) earlier in the month following a decision by the European banks to put a cap on sale and lending of gold for next five years.
Now, gold in the world market has fallen to a one-month low as overbought conditions were corrected. Stop-loss selling below the level of $ 300 has accelerated the downward price correction in the global bullion market. Increased liquidity in the gold lending market, weak buying interests and lack of short covering by producers with troubled hedgebooks pulled down the prices in the global market.
Lower short-term lending rates have prompted short-selling by gold miners and producers as well as speculators in the international market. "Actually the lower lease rates weighted on spot-gold prices and cooled down the overheated market. The lower lease rates has receded fears of a liquidity squeeze," Parikh remarked.
Festival buying for gold this year is at a sober pace. A month-end fall in the liquidity with seasonal buyers has also left jewellery shops dry. The demand is expected to pick up since people receive a Diwali bonus. Also, jewellers are trying to attract potential buyers with different sales promotional schemes aheadi. Meanwhile, the Jaipur Chamber of Commerce and Industry has appealed to the people to avoid purchase of gold during Diwali season this year. The Chamber has alleged that prices of gold were pulled up artificially as part of an international conspiracy. Global banks and producers have jacked up prices to squeeze profits from Indian buyers who are fond of buying gold in Diwali, the Chamber alleged.
ELECTION 99 |
SINGLES | BOOK SHOP | MUSIC SHOP | HOTEL RESERVATIONS | WORLD CUP 99
EDUCATION | PERSONAL HOMEPAGES | FREE EMAIL | FEEDBACK