The Hindu Business Line : Traders expect gold prices to continue rising

Hyderabad, Jan. 29 Gold continues to hit new highs. On Tuesday, the price of standard gold was Rs 11,895 per 10 gram in the Mumbai bullion market, adversely impacting sales in the commodity in the local market.

Traders expect that it will further increase and rule in the range of Rs 12,000-12,500 by March. The price of gold was at Rs 8,850 in January 2007.

“The slowdown in the US economy, increase in crude prices, and stagnant mining have resulted in the sudden spurt in gold prices,” Mr M.L. Gupta, Vice-President of Twin Cities Jewellers Association, told Business Line.

Safe option

“The fluctuations in the global economy have led investors to look at precious metals as a safe investment option. This has led to the growth. We expect this will further grow in the next few weeks and reach Rs 12,500 in March,” Mr Gupta, who promotes Mussadilal Jewellers Exporters, said.

“Recession and sub-prime crisis in the US made the investors and equity funds opt for heavy buying into gold. The European Banks, which used to sell gold, also reduced the volumes,” Mr Mahabaleshwar, President of Andhra Pradesh Bullion Importers’ Association, said.

Stoppage of a mine in South Africa due to power shortage contributed to the problem as well.

Impact

Consumers have put off their plans to buy gold and jewellery, unless it is necessary. “They are buying only when there is a wedding round the corner. They are waiting for the price to come down,” he said.

With the wedding season approaching, traders are expecting an increase in sales in the next few weeks.

More Stories on : Gold & Silver | Gems & Jewellery | Karnataka

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