• Investment World
• eWorld
• Brand Line
• Mentor
• Life
• Brand Quest
• The New Manager

Stocks

• Quotes
• SE Diary
• Scoreboard
• Open-End Mutual Fund

Cross Currency

• Rates
  
  

Shipping

• Ports
  
  

Archives

• Yesterday
• Datewise
• Resources
• In Focus
• In Depth

Group Sites

• The Hindu
• The Hindu ePaper
• Business Line
• Business Line ePaper
• Sportstar
• Frontline
• The Hindu eBooks
• The Hindu Images

Gargi Shah

Mumbai, Jan 8 Domestic gold prices zoomed to Rs 11,125 per 10 gm, lead by rates in the global markets rising to record high of $875 an ounce.

The surge in the yellow metal’s price is owing to strong buying by the funds and surging crude oil prices, according to analysts.

High prices have resulted in halt of import activity of gold and offtake from the bank’s bullion counter.

However, investors and jewellery makers have found sales of old and outdated jewellery to be worthwhile.

Scrap sales in a day at Zaveri Bazaar in Mumbai were to the tune of around 50 kg a day, said a scrap dealer.

However, appreciation of the rupee to Rs 39.27 against the dollar and disparity in the domestic prices took away some charm from the domestic prices.

Though the landed cost of gold in India may be computed at Rs 11,125 per 10 gm plus 1 per cent VAT, the market price is at a discount.

Prices are ruling at a discount of 1-2 per cent of the sale value, a scarp dealer said.

Only the banks landed cost of gold has increased, but the market price is at a discount, said Mr. Bhargav Vidya of B. N. Vidya and Associates.

Going ahead if the prices increases further and the demand gets poorer, then the disparity in the market price and the landed price will increase further, said an official of Axis Bank.

But despite the high price investors don’t see more returns in the gold market for investment.

Investors have gone in to invest in the stock markets, as returns on stocks are higher than what gold can give, said Mr. Suresh Hundia, President of the Bombay Bullion Association.

Tuesday’s surge to Rs 11,125 from Rs 10,980 is only a 1.32 per cent rise while a usual return in the stock market is atleast 3 to 4 per cent, he said.

More Stories on : Gold & Silver | Commodity Markets

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
Promoters to hike stake in Aditya Birla Nuvo

Copyright © 2008, The Hindu Business Line. Republication or redissemination of the contents of this screen are expressly prohibited without the written consent of The Hindu Business Line