Gold Zooms past Rs 30,000 level

NEW DELHI, June 2: Gold prices today jumped sharply up to Rs 1,095 per ten gram crossing the Rs 30,000 per ten gram level, its all-time high, on account of rise in global prices of precious metal and weakening rupee.
The maximum jump in prices was seen in Chennai, where gold became costlier by Rs 1,095 at Rs 30,380 per ten gram, followed by Delhi with a again of Rs 960 to Rs 30,300.
In Mumbai and Kolkata too, gold prices increased sharply by Rs 895 and Rs 785, respectively. Gold prices are ruling at Rs 30,030 per ten gram in Mumbai and Rs 30,245 per ten gram in Kolkata. In Delhi, the previous high was Rs 29,750 on May 4.
The rally in domestic market was due to steep increase of gold prices by USD 66 to USD 1,626 an ounce in New York, which normally sets price trend for India.
“Gold attracted fresh investment in the global market since yesterday after the US announced weakening job prospect leading to a rise in demand for precious metal as an inflation hedge,” commodity brokerage firm JRG Wealth Management Head of Research Harish Galipelli told PTI.
The weak rupee has also weighed on prices, he added.
The rupee has depreciated sharply after the Budget and was ruling yesterday at 55.54 against the dollar. It had touched an all-time low of 56.52 against dollar on May 31.
Expressing similar views, Bombay Bullion Association President Prithviraj Kothari said, “Bearish sentiments in global and domestic equity and forex markets has led to a spurt in gold buying both in India and outside.”
Gold is considered as a safe haven asset when other assets like stocks are not doing well.
Rupee depreciation and high global prices have together impacted domestic gold rates. Besides, the hike in import duty to 4 per cent has also contributed in price rise, he said.
Kothari warned that if global prices continue to rise and rupee falls further to 57-58 against dollar, local gold prices could touch Rs 32,000 per ten grams.
India, the world’s biggest gold consumer, had imported 969 tonnes of gold last fiscal.
When asked if high gold prices would hit demand, Kothari said, “Normally, gold demand remains sluggish in June-July due to less number of marriages and festivals besides being monsoon period. But high prices will further bring down demand.”
In June 2011, about 55 tonnes of gold were imported to meet the domestic demand. This could come down to 40 tonnes in June this year if gold rates prevail at higher level, he said.
Already in the last two months, imports have declined to 80-90 tonnes from 180 tonnes in April-May period of last year, Kothari said and added that costlier gold would encourage domestic consumers to recycle their old jewellery.
A Delhi-based jeweller Rakesh Anand said gold buying has increased among jewellers and stockists to meet wedding season demand expected later this month.
“Gold prices are likely to remain above Rs 30,000 per ten gram level in the coming days,” he added. (PTI)