The Hindu Business Line : Global funds turn bullish on gold

The skyrocketing price came in the backdrop of global funds turning bullish on the yellow metal in the international markets. The mood was cautious in the domestic market with jewellers and individual buyers opting to `wait and watch'.

For the first time, pure gold prices breached the Rs 6,900-mark to quote at Rs 6,905 per 10 gm as spot price of gold in the New York market firmed up to $475 per ounce on Fridaynight.

"Domestic demand for gold has not picked up this week as domestic prices are now at peak level. Gold demand was low in the past few days because it was inauspicious to buy gold till last Monday," Mr Prithviraj Kothari, Director of Riddhi Siddhi Bullions Ltd, told Business Line.

Normally, domestic demand for gold picks up around Navratri and continues till Diwali.

"Fresh buying of gold coins by major corporates and investors has started, but on a low-key as prices have been moving up consistently. Purchase may go down by 5-10 per cent in volume terms this season but in value terms, it will be on par with sales last year," Mr Bhargava N. Vaidya, a bullion analyst, said.

According to Mr Kothari, demand for gold coins and jewellery could be delayed by 10 days as new buyers may prefer to wait and watch the market for a few more days.

"Inflows of scrap sales (in the form of old ornaments) have been reported in the southern region including Bangalore, Chennai and some parts of Kerala due to rise in gold price," he said.

Gold biscuit prices have also moved up by about Rs 1,500 and quoted at Rs 80,500 per piece (one biscuit is 116.50 gm) on Saturday from Rs 78,800 four days ago .

Major banks including Bank of Nova Scotia, Union Bank and ICICI Bank have stock-on-hand ranging between a tonne and four tonnes each. The daily consumption now is at around 250-300 kgs of gold in the Mumbai markets. Meanwhile, inflows from Ahmedabad, a major gold supplying centre, remained low but overall supply remained relatively comfortable.

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